You see it all the time when flicking through catalogues or in commercials on TV: ‘Was $199, now $99’ or ‘we’ve slashed the price by $50 to $49.95’. It’s called ‘was/now price marketing’ and it’s a proven way to get consumers’ attention and propel them towards buying a product they think is now good value.
It’s all good and well to do this if the product in question was once priced at the higher amount – and not just for a few minutes – before cutting the price to turn heads through high impact marketing. What’s not okay is when a retailer either never offers the original price or only offers it for such a short period of time to make the advertising disingenuous. So popular is this form of marketing that the ACCC is putting all retailers on notice.
“Truth in advertising is not just a slogan, it’s the law. The Australian Consumer Law aims to put businesses on a level playing field by requiring them to truthfully advertise their goods or services,” said ACCC deputy chair Dr Michael Schaper.
“Nor can they try to get an unfair advantage over other firms by misleading their customers.”
“Whether on television, radio, the internet or print media – businesses must ensure their advertising and selling practices comply with the law.”
What is and isn’t allowed in advertising is all spelt out in a new ACCC guide to Advertising & Selling, which can be downloaded for free as a web page, PDF and even an audio book.
“The revised publication provides businesses and their advertising and selling agents with detailed, practical information about how the consumer law applies to their specific selling and promotional activities.
“It also includes new guidance for businesses seeking to promote their products or services using ‘was/now’ or ‘strikethrough’ pricing.”
Any retailers thinking of skipping this free tutorial from the ACCC are advised to take note of the recent case against jewellery retailer Zemel’s, which was penalised $250,000 for misleading was/now price marketing.
Here’s an ACCC video that explains the rules further: