Guidelines for the Retail Sector on Price Promotions
Reductions from a previous price - "Was/Now" Advertising
"Was/Now" Price Advertising applies when a trader compares the current selling price of a product or service with a previous price that he/she had used. A genuine reduced price should take into account a number of factors, such as:
(a) The previous reference price, which should have been pitched at a realistic level at which the trader would honestly believe that the goods could be sold and that the goods were actually on sale at that price,
(b) The goods must be offered for sale at the higher price for a reasonable preceding period that would allow consumers sufficient time to:
- Become aware of the availability of the goods to be acquired;
- View the goods; and
- Make up their minds whether to purchase them
(c) The availability of reasonable quantities of the goods for sale, at the higher price.
What determines "reasonable quantities" would depend on the product, the duration of the offer and the expected demand.
There should be full clarity in relation to which products are covered by a particular promotion and which are not.
Furthermore, in relation to bundled products, e.g. a computer with a free printer, a sales promotion comparison should be based on the bundled product, not on the computer excluding the printer.
Insofar as "Final Reductions" are concerned, such a statement should be accurate and not misleading. For clarification purposes, the original price, the "sale" price and the final discount price should be clearly indicated.
The Consumer Protection Act prohibits misleading commercial practices. In the context of own price advertising, the Act states:
"if the commercial practice involves a representation or creates the impression (whether in advertising, marketing or otherwise) that a product was previously offered at a different price or at a particular price, consideration shall be given to whether the product was previously offered openly and in good faith at that price and at the same place for a reasonable period of time before the representation was made..." - Section 43(6)(a)
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