ACM still sees many misleading discounts, and advises: check before you buy
Summary
- Following an investigation, ACM found that 75 percent of retailers presented their discounts incorrectly.
- Consumers are thus misled, because the discounts seem bigger than they truly are.
- ACM continues its investigation, and advises consumers: check before you buy.
As the holiday season (in the Netherlands, starting with Black Friday, followed by Sinterklaas on December 5, and ending with Christmas) approaches, the Netherlands Authority for Consumers and Markets (ACM) has examined in what ways retailers present their discounts. In its investigation, ACM saw that 75 percent of retailers did not present their discounts correctly, and, as such, misled consumers. ACM particularly saw online deception with ‘was’-prices: many crossed-out prices with discount percentages next to them that make the discounts seem bigger than they are. ACM is currently confronting businesses that do not comply with the rules, and is asking them to adjust their price presentations. If businesses fail to do so, ACM can impose sanctions. ACM’s advice for consumers is: check before you buy (in Dutch: eerst checken, dan bestellen). If the check works out unfavorably for you, do not place an order.
What seems to be the problem?
Over the past few weeks, ACM has investigated the promotional deals of 24 major retailers in various sectors: furniture, clothing, do-it-yourself and gardening, consumer electronics, and cosmetics. ACM looked at the promotional deals in both online stores and brick-and-mortar stores. Misleading price presentations were established at 18 of the 24 examined retailers.
Fleur Severijns, manager in ACM’s Consumer Department, adds: “People make a lot of purchases around this time of the year. Businesses capitalize on that uptick in purchases by promoting products that have seemingly significant discounts. In practice, those discounts are often disappointing, especially if the lowest price is compared with a fancy ‘was’-price that has never been charged. Such practices are not only misleading consumers, but also constitute unfair competition with businesses that do comply with the rules. That’s why we are taking action against this.”
Most of the problems occur with the presentation of the ‘was’-price, which is the price with which the discount is compared. Various terms are thrown around, such as ‘recommended retail price’ or ‘regular price’, without any clarity on what is meant by those terms. In the Netherlands, the ‘was’-price must be the lowest price that the seller has actually charged over the past 30 days. The discount must be compared with that price. If this is not the case, it is considered deception. ACM takes action against such practices. A court recently ruled in ACM’s favor with regard to fines that ACM had imposed on two online stores for using fake discounts.
For consumers, it is important that retailers present their prices clearly and honestly. In that way, consumers are able to make well-informed decisions when making purchases. Retailers know that consumers are sensitive to promotional deals. That is why, ACM paid special attention in September to the correct presentation of discounts in order to ensure that businesses offer genuine discounts.
Do not be fooled by fake discounts: Check before you buy
Retailers sometimes offer steep discounts, especially for Black Friday and the holidays. However, not all promotional deals are genuine deals. Some retailers make discounts seem bigger than they are. As a consumer, you are entitled to honest and clear prices. That is why it is important always to check first whether a discount is correct before buying something. With its campaign ‘Check before you buy’ (in Dutch: Eerst checken, dan bestellen), ACM’s consumer information portal ACM ConsuWijzer offers tips on how to recognize fake discounts.
With these simple checks, you can tell easily whether or not a promotional deal is genuine:
- Be alert when seeing steep and unexpected discounts
A very steep discount sounds appealing, but such discounts are almost never offered by trustworthy sellers. - Check whether the discount is a genuine discount
Sellers sometimes raise the old price first. That makes the discount seem bigger. Therefore, check what the product’s previous price was, for example, on price-comparison websites. You will find the price histories of products there. - Compare the promotional deal with other sellers
Check what other sellers are charging for the same product. Is one seller much cheaper? That might be an indication that something is not right.
Have you checked the discount, but you are not familiar with the online store? Check also whether or not the online store is trustworthy, for example, by checking reviews on multiple review websites, and do not place an order if you are have any misgivings.