ACM takes action against websites that use fake discounts
Consumers cannot be persuaded into making purchases with discounts that are not genuine discounts. That is why, over the past few months, the Netherlands Authority for Consumers and Markets (ACM) has checked whether the prices on websites comply with the rules on discounts. When checking those prices, ACM found so many fake discounts that these suggest there is a structural problem. ACM will therefore take action against websites that use fake discounts.
Edwin van Houten, Director of ACM’s Consumer Department, says: “Consumers are sensitive to the prices of products, especially when discounts are involved. However, a discount must be a genuine discount, and not just a gimmick to lure consumers. We have drawn attention to the rules on discounts. Unfortunately, we now see that too many websites still use fake discounts. As a result, consumers are misled, and they lose confidence when making purchases. In addition, it is a form of unfair competition. That is why we will take action against these businesses. The use of fake discounts has to stop, right now.”
What is this case about?
Since 1 January 2023, ACM has enforced compliance with the tightened rules on ‘was/now’ prices. The basic principle is that the discount is given on the lowest price for which the product was offered in the 30 days prior to the discount. Several exceptions apply to that rule: perishable products, products that have not been on the market for at least 30 days, and cumulative discounts (for instance from 10% to 20% to 30% off). ACM has informed businesses about the introduction of the tightened rules, and has announced that it will enforce compliance with those rules.
Over the past few months, ACM has checked the discounts of online sellers in several sectors: clothing, consumer electronics, and bedding stores. ACM discovered that a large share of those businesses consistently violated the rules.
ACM will now take enforcement action. When determining a violation, ACM can impose a fine or an order subject to periodic penalty payments.
What other irregularities were found?
Price is one of the most important characteristics of a product on which consumers base their purchase decisions. Business owners obviously know this, too, and take advantage thereof and sometimes exploit that unfortunately. We have seen various irregularities when it comes to the presentation of prices.
For example, ACM sees that businesses present discounts in comparison with a higher price that they charged previously, but not during the 30 days prior to that discount. The price that was charged in the 30 days prior to the discount is mentioned somewhere, but is not used as a reference price for the discount. That is not right. The discount must be given on the lowest price that was charged in the 30 days prior to that discount, and it must be presented in comparison with that price.
In some cases, the recommended retail price, too, is presented in a way that puts consumers on the wrong track. This can be a misleading practice. It is important that consumers are not presented discounts that are not genuine discounts.
In addition, comparing the ‘was-price’ of a product’s larger-sized packaging with the ‘now-price’ of a smaller-sized packaging of the same product is also considered a misleading practice.
For consumers, it is important to look at the price they ultimately have to pay. They should not be fooled by fake discounts.