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Misleading price displays
Businesses must not display prices that are wrong or likely to create a false impression. This includes prices displayed in store, in advertising, or whenever communicating with customers. See False or misleading claims for more information.
Ways that a displayed price can be misleading
- Stating the sale price is marked down from an earlier price when:
- the items were not sold at that price in a reasonable period right before the sale started, or
- only a very small proportion of items were sold at that price right before the sale.
- Comparing the displayed price with an incorrect cost or wholesale price.
- Comparing the displayed price to a recommended retail price (RRP) that no-one generally charges for the product.
- Advertising a price that is not the total price the consumer will have to pay.
- Promoting a price as being a sale or special price, when it is actually the normal price.
- Where an item is offered at a sale or special price for an extended period of time, it may be misleading to call it a sale or special price, as the price has effectively become the new selling price.
In this example, the price display is misleading if the item was never offered for sale at $19.99.
‘Drip pricing’ is when a price is advertised at the beginning of an online purchase, but then extra fees and charges (such as booking and service fees) are gradually added during the purchase process. This can result in consumers paying more than they initially intended to.
Businesses must be upfront and clearly disclose to consumers at the start of a purchasing process the types of fees that will apply and when.
Consumers should be wary of misleading ‘drip pricing’ practices when shopping online, particularly when purchasing airline, ticketing, accommodation and vehicle rental services.
To try and avoid paying more through drip pricing consumers should:
- not just focus on the advertised price – add up all the charges together to figure out the total final price you will have to pay and whether this is good value for money
- be prepared to back out of the transaction and shop around to find a better final price from a competitor
- look out for pre-selections and make sure to deselect anything that’s not wanted.
How to avoid misleading customers
We have a guide to help business owners avoid misleading customers.
When more than one price is displayed
Sometimes businesses display different prices for the same item. If this happens, even by mistake, the business must either:
- sell the product for the lowest displayed or advertised price, or
- stop selling the item until the incorrect price is corrected.
This does not apply when:
- there are different prices for different regions
- one price is hidden by another price. For example, one price sticker covers another
- a unit price is displayed
- a price is displayed in an overseas currency.
When the price at checkout does not match the displayed price
Sometimes the price of an item in store or online at the checkout may not match the displayed or advertised price in store or online. If this happens, even by mistake, the business must either:
- sell the product for the lowest price - either the checkout price, or displayed or advertised price, or
- stop selling the item until the incorrect price is corrected.
Display of total price
Minimum total cost
Businesses must display the total price of a product or service as a single figure. This price must be the minimum total cost – the lowest amount a customer could pay, including any taxes, duties and unavoidable or pre-selected extra fees. This includes any surcharges or other fees which may apply every day of the week. See display of surcharges for more information.
The total price of an advertised holiday must include GST and airport taxes.
Optional extras that are pre-selected
Optional extras must be included in the total price, if the business pre-selects these options for customers. ‘Pre-selected’ means the business will include these options – and charge for them – unless the customer removes them.
Seat selection for a plane flight is pre-selected by the business and will be charged, unless the customer opts to turn it off. Carbon offsets is not selected by the business and will not be charged unless the customer selects this option. The total price for the flight must include the cost of seat selection as this is pre-selected by the business. It doesn't need to include the cost of carbon offsets.
Optional extras that aren't pre-selected
The total price does not need to include optional charges that have not been pre-selected.
If a business charges delivery fees, but consumers can also choose the option to click and collect for free, the business does not need to include the delivery charges in the prices displayed for its products.
Extra charges that can't be quantified
The total price does not need to include extra charges that can't be quantified (converted into a dollar amount) at the time of stating the price of a product or service.
Holiday serviced apartments provider advertises its rooms as ‘from $117 per night’. The business also charges a $7 per person cleaning fee. Until someone makes a booking, the business doesn’t know how many people will be staying under that booking. As such, the business is unable to calculate the per night charge inclusive of the cleaning fee when making general advertisements of the apartments’ prices.
However, given at least one person would be staying under any booking, the business should include one $7 cleaning fee in the advertised price. As soon as the business becomes aware of how many people are staying under a booking, the business must inform the customer during the booking process of the full total price. The full cleaning fee will be able to be calculated at that point.
Prominence of prices
If a business also displays a price for just one part of a product or service, the total price must be at least as prominent as the partial price.
A prominent single total price is one that is clear and stands out so that it is easily noticed by a consumer.
A business can advertise the cost of a 2-year contract as a per month fee, as long as it advertises just as prominently the total cost of the contract over the 2 years.
A business can display the price of its services without including the cost of the mandatory booking fee it also charges, but only if it also displays the prices inclusive of the mandatory booking fee. The prices inclusive of the booking fee must be displayed just as prominently as the display of the prices without the booking fee included.
Displaying prices to other businesses only
If a business is displaying prices only to other businesses, it doesn’t need to include GST in the total price.
Display of unit prices
Some businesses that sell groceries must show a unit price alongside the total selling price for certain products. Unit pricing helps consumers compare prices and find the best value for money.
See Unit prices for groceries for more information.
Display of surcharges
Card payment surcharges
In general, businesses can charge a surcharge for paying with a credit, debit or prepaid card, but the surcharge must not be more than what it costs the business to use that payment type. There are rules around what businesses can include in calculating these costs.
If there is no way for a consumer to pay without paying a surcharge, the business must include the minimum surcharge payable in the displayed price for its products.
Where there are other ways for a consumer to pay without incurring a surcharge or other fees, businesses should display these charges in a prominent way so that consumers are aware of the additional costs before payment.
See Card surcharges for more information.
Weekend and public holiday surcharges
Some restaurants and cafes charge a surcharge on certain days – usually weekends or public holidays.
Although this surcharge is unavoidable, they don't need to include this charge in the total price displayed for their products, as an exemption under the law applies to them.
However, if they charge such a surcharge, they must include these words on the menu:
A surcharge of [percentage] applies on [day or days].
These words must be at least as prominent as the most prominent price on the menu.
Consumers should be made aware of any weekend and public holiday surcharges that may apply before they decide to order or purchase products from restaurants and cafes. If the menu does not list prices, information about these surcharges must be displayed in some other prominent way.
Other surcharges or fees
Businesses are generally able to set their own prices, including charging surcharges or fees. However, businesses must not mislead consumers about what they’ll be charged or why.
Consumers should be made aware of any surcharges or fees that may apply before they decide to order or purchase goods or services. Businesses should display any surcharges or fees in a prominent way so that consumers can easily and clearly see whether there are any additional costs that may apply before making a decision.
See Display of total price for more information.
A restaurant charges a 10% surcharge on Sundays, 15% on public holidays and a 5% surcharge Monday to Saturday on top of the prices displayed on its menu. There is no day a consumer can purchase an item at the price that is displayed on the menu, as a minimum of a 5% surcharge applies every day.
In this scenario, the business must include a 5% surcharge in the total price of its items as a single figure. Since a 5% surcharge applies every day of the week, it is now part of the minimum total cost of the restaurant's items.
The additional 5% surcharge on Sundays and 10% on public holidays must be disclosed by including the words on the menu as stated above.