'Component pricing' is the practice of promoting the sale of goods or services by dividing the total price into a number of components. For example, quoting the price of a new stove as $1,000 without including the $100 GST the consumer will be charged.
If a business wishes to use component pricing, it must specify as a single figure the total amount the consumer must pay. The total price must be displayed just as prominently as any component of the price.
The single figure must include any tax (e.g. GST), duty, fee (e.g. a storage or installation fee), levy or charge that is included in the amount the consumer will pay.
- A stove is advertised for '$1,000 + $100 GST'. This is unlawful as the total amount consumers must pay is not stated as a single figure.
- A stove is advertised as '$1,000 + $100 GST = Total $1,100'. This is unlawful as the total amount consumers must pay is not specified as prominently as the price of the stove component.
- A stove is advertised as '$1,000 + $100 GST = Total $1,100'. This is fine as the total price is specified prominently as a single figure.