ACM wishes to see honest discounts in order to protect consumers against deception
Summary
- ACM has published its Guidelines regarding price indications and price comparisons, which explain how business owners are able to indicate prices and discounts without misleading consumers.
- Only with fair prices are consumers able to compare different special deals properly.
- Over the next few months, ACM will examine whether businesses comply with the rules on discounts, as explained in the guidelines.
In order to stimulate sellers to indicate their prices honestly, the Netherlands Authority for Consumers and Markets (ACM) has published its Guidelines regarding price indications and price comparisons (in Dutch: Leidraad prijsweergave en –vergelijkingen). Consumers are guided by the way in which sellers indicate prices. That is why sellers sometimes use discounts (price reductions) in relation to prices that have never been used. With such practices, sellers put consumers on the wrong track, and price indications are misleading. As a result of misleading price indications, individuals are no longer able to compare real prices properly, and ultimately pay more. These guidelines explain how business owners are able to indicate prices and discounts without misleading consumers.
Edwin van Houten, Director of ACM’s Consumer Department, explains: “With the introduction of stricter rules surrounding ‘was/now’-prices, we saw the rise of various new forms of deception for presenting discounts as attractive. For example, we saw that the ‘was’-price was temporarily raised in order to make discounts seem larger, or the discounts were offered on recommend retail prices that had never been used. Such practices are not allowed. This is explained in these guidelines with the help of examples.”
Basic rule regarding discounts
Sellers must clarify their discounts by comparing the reduced price with the lowest price that they charged in the 30 days preceding the discount. In addition to their own prices, they can also use other reference prices, such as recommended retail prices. If they do, they must do so honestly. Such reference prices must be realistic. This means that a price cannot be inflated artificially in order to make a ‘discount’ seem larger than it actually is. Sellers cannot suggest a discount if there is none.
If sellers comply with these rules, consumers will have trustworthy information, enabling them to compare prices better.
Honest price indications
It is important for consumers that prices are indicated honestly. Consumers always need context in order to be able to assess whether a special deal is truly advantageous. A realistic reference price (with which the price is compared) can offer such context. If a reference price is not realistic, consumers are given misleading information. With higher reference prices, consumers may wrongly believe they found a great deal. That may ultimately lead to consumers comparing less and paying more than necessary. With realistic reference prices, consumers are able to make well-informed choices. In addition, honest price indications help create a level playing field for businesses. That is why anyone who wishes to do business in the Netherlands must comply with the rules and regulations regarding price indications and discounts.
Over the next few months, ACM will examine whether businesses (both brick-and-mortar stores and online sales channels) comply with the rules on discounts, as explained in the guidelines. If businesses fail to comply with these rules, ACM has various instruments to take enforcement action.
Consumers are able to file a report with ACM if they believe that a seller offers a misleading discount. They can do so with ACM’s consumer information portal ACM ConsuWijzer: File a report with ACM ConsuWijzer | ACM ConsuWijzer (in Dutch).
See also
- Guidelines regarding price indications and comparisons | ACM
- ACM has fined online stores for using fake discounts | ACM