ACM warns against fake discounts

The Netherlands Authority for Consumers and Markets (ACM) sees that businesses offer products online where it seems as if consumers are getting a discount, but which appears not to be the case. In order to prevent consumers from being confronted with fake discounts during Black Friday and the holidays, ACM would like to remind retailers of the relevant rules.

Many retailers use ‘was/now’ promotional deals to emphasize how big the discount is that consumers are getting. In that context, ACM sees that, in many cases, different prices are used. For example, the lower retail price of the offer is compared with the “suggested retail” price, “manufacturer’s price”, “normal” price or “original” price. These prices are crossed out in the offer or are accompanied by a discount percentage. In that way, it seems as if the retailer gives a discount on the previously mentioned price, whereas that is not the case since they never used that price. The retailer can only use ‘was/now’ prices if the crossed-out price was actually charged during the past 30 days.

Edwin van Houten, Director of ACM’s Consumer Department, adds: “With Black Friday and the holidays approaching, many people are on the hunt for presents. Retailers capitalize on that demand by offering promotional deals. To make sure that these promotional deals are genuine deals, we are reminding retailers once again of the relevant rules: a discount is only a discount if it’s really a genuine discount.”

Giving a discount

Retailers like to present products with discounts because they know that consumers react positively to promotional deals. Price is one of the most important characteristics on which consumers base their purchases. If consumers think that they can buy something with a discount, they feel an incentive to make a decision quickly. However, if something only seems to be a discount, but it is actually not a genuine price reduction, it will put consumers on the wrong track. It is then considered a fake discount because the crossed-out price was never charged, or because the price is accompanied by a percentage, making it seem as if the price of the offer has been reduced by that percentage, whereas that is not the case. Consumers could then be misled, and make purchases that they would not have made otherwise.

Rules regarding discounts

The basic principle is that the discount is given on the lowest price that the retailer used as the selling price in the 30 days prior to the discount. The lower retail price can only be compared with that price.

In their communications, retailers can mention the suggested retail price, but consumers cannot be misled by this. In order to prevent this, retailers must make clear what this price entails, and avoid the suggestion of a discount. Retailers can do so by not crossing out the suggested retail price (if they never charged it) and by not presenting a discount percentage.

ACM enforces compliance with the rules regarding ‘was/now’ prices, as well as with the Dutch Unfair Commercial Practices Act (OHP). If ACM establishes violations of these rules, it can impose fines of up to 900,000 euros per violation.

Recognizing fake discounts

It is very difficult for consumers to distinguish genuine discounts from fake discounts. Something that can help in determining whether or not a discount is fake is to compare the price with the prices charged by other online stores for the same product. Is there a particular item that you really want to purchase for the holidays? Go check prices today and build your own price history. In addition, you can often also check the product’s price history online.

Informational meeting for retailers

ACM will hold an informational meeting about the rules regarding presenting prices and discounts online, aimed at retailers that wish to know more about how they can give discounts in the right way. This informational meeting will be held on:

• Thursday, November 7, 2024, between 2:30 pm and 4:30 pm at the offices of ACM
• Address: Muzenstraat 41, 2511 WB, The Hague, the Netherlands
• Registration is open until October 24, 2024 by sending an email to bijeenkomstprijsaanduiding [at] acm [punt] nl