Promotions must be genuine promotions

In the run-up to this year’s holiday season in the Netherlands (consisting of December 5 and Christmas), the Netherlands Authority for Consumers and Markets (ACM) reminded several major toy store chains of the rules regarding price promotions. These chains promoted a number of toys that were sold at reduced prices. However, they had never actually sold these products at the advertised ‘original’ prices over the past 12 months. The effect of such a practice is that consumers are tempted to act fast, whereas the advertised price reduction is not an actual discount. ACM thus decided to explain the rules regarding price promotions to these chains. If the ‘original’ price is a suggested retail price, the store has to indicate this clearly with the advertised price. If a store offers a discount on a previously used price, the product in question must have actually been available in that store recently for that original price. ‘Recently,’ in this context, means: no more than three months ago. This rule applies to all products and to all sales channels. The toy store chains that had been contacted by ACM have stated that they will advertise their prices in this manner from now on.

Investigation into toy prices

Over the past 12 months, ACM has tracked prices of various products sold by several major chains, including several popular toys. ACM has found that not all promotions are genuine promotions. Consumers must be able to rely on the assumption that promotions offer them real price benefits. Henk Don, Member of the Board of ACM, adds: “Promotions should be genuine promotions. If that is not the case, consumers are being misled. And that would hurt consumer confidence in honest prices, and hurt fair competition between businesses.”

Clear prices

Clear prices are one of ACM’s top priorities. Price is one of the most important criteria on which consumers base their purchasing decisions, and with which they are able to compare different offers. Prices must be honest and clear. Discounts must provide real price benefits. Dishonest or unclear discounts may harm consumers, but also harm businesses that offer genuine discounts. In 2017, ACM will continue to monitor price trends in stores. ACM will take enforcement actions against stores that still use dishonest or unclear promotions.