Consumers must be cautious when it comes to sales and discounts, as unscrupulous retailers may mislead them. The Competition and Consumer Protection Commission (CCPC) recently highlighted the potential pitfalls of navigating sales and discounts. Kevin O’Brien, a member of the CCPC, emphasized the importance of consumers knowing their rights and being aware of genuine discounts. The CCPC has warned businesses planning their winter sales that they will be closely monitoring to ensure discounts are legitimate and consumers are not misled.
Last year, new rules were introduced regarding price reductions, and the CCPC’s recent announcement is in line with these regulations. The Price Indication Regulations provide clear requirements for the use of discounts. Any announcements such as “sales” prices, “special offers,” or “Black Friday offers” that create the impression of a price reduction must adhere to these rules.
According to the law, when a business announces a price reduction, they must display the lowest price the product was sold for in the previous 30 days and base the discount on this price alone. As the enforcement body for consumer protection laws, the CCPC closely monitors the market. Last year and earlier this year, the CCPC analyzed pricing data from various retailing websites and discovered concerning pricing practices. Some traders had not changed their practices regarding price reduction announcements, despite the introduction of new rules.
One example of non-compliance is when traders fail to display the prior price of a product when announcing a price reduction. The prior price should be the lowest selling price within the previous 30 days before the reduction. The CCPC observed that traders frequently neglected to do this. For instance, if a product was priced at €1,649 from December 23, 2022, to January 24, 2023, and then increased to €1,949 from January 25, 2023, to February 8, 2023, the price reduction announcement on February 9, 2023, should indicate a prior price of €1,649, not €1,949.
Furthermore, if a trader briefly increases the price of a product before immediately reducing it back to its previous price, they cannot use the briefly increased price as the prior price in their price reduction announcement. The prior price should be the lowest selling price applied to the product in at least the last 30 days. If a trader applies consecutive reductions to the selling price of a product as part of a sales campaign, the prior price remains the same for all successive price reduction announcements during the campaign.
Under recent changes to the Consumer Protection Act 2007, a commercial practice is considered misleading if it is likely to deceive or mislead the average consumer or influence their transactional decision. This includes providing false, deceptive, or misleading information about the existence or nature of a specific price advantage.
The CCPC has also found that some traders apply price reductions for excessively long periods compared to the duration of the product being sold without a reduction. For example, if a product is priced at €79.99 for two months and then reduced to €49.99 for ten months, a price reduction announcement indicating a prior price of €79.99 would be misleading, as the product has not been sold at that price for almost a year.
Another misleading practice is when traders fabricate recommended retail prices to make a discount appear better. For instance, if a product’s price is reduced from €1,699 to €1,499 on December 24, 2022, and the price reduction announcement features a recommended retail price of €2,799, even though the product was never offered for sale at that price, it is considered an offense.
The CCPC has been engaging with businesses to inform them of their new obligations regarding pricing regulations. However, the engagement phase is now over, and sales pricing has become an enforcement priority for the CCPC. The CCPC will continue to monitor the market, particularly in the upcoming busiest shopping months of the year. If any offers are found to mislead consumers, the CCPC will engage with businesses and take enforcement action if necessary.
In addition to physical stores, consumers must also be cautious when shopping online. Unscrupulous online retailers may use manipulative tactics known as “dark patterns” to influence consumer choices. These tactics work on a subconscious level and fall into various categories. One example is the use of activity messages, which inform consumers about the actions of others on the website to create a sense of urgency and the fear of missing out on a popular product.
It is crucial for consumers to stay informed, know their rights, and be vigilant when it comes to sales and discounts, whether in physical stores or online. By being aware of the regulations and recognizing manipulative tactics, consumers can make informed decisions and avoid being misled.