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Rules on ‘was/now’ pricing soon to be clearer to consumers and businesses

Consumers are susceptible to special offers. Sellers take advantage of that susceptibility by presenting items as ‘special offers’ using ‘was’ prices and ‘now’ prices. It is difficult for consumers to check whether the presented price advantage is genuine or not. Businesses are able to adjust their prices constantly, especially online. Consumers often do not know whether that special deal they see is real or not. The law prohibits sellers from misleading consumers using fake discounts. The Netherlands Authority for Consumers and Markets (ACM) enforces compliance with those rules. Products must actually have been sold at the presented ‘was’ price for a period of three months prior to the special offer. New European rules will come into effect at some point next year, which will protect consumers even better against fake promotions.

Edwin van Houten, Director of ACM’s Consumer Department, adds: “Only if prices are presented in a fair manner will consumers be able to assess and compare offers properly. With the new stricter rules coming into force next year, consumers will be better protected against fake discounts.”

‘Was/now’ pricing

For consumers, price is one of the most important factors on which they base their purchase decisions. A high ‘was’ price gives consumers the impression they are getting a substantial discount, and reduces the likelihood that they will search for alternatives. Sellers consciously take advantage of consumers’ susceptibility to special offers, both offline and online. Businesses have many opportunities, particularly online, to experiment with prices and to differentiate themselves from others. In order to protect consumers, rules are in place that stipulate how sellers must display their prices, at what point they are allowed to call something a special offer, and how that special offer must be presented. The current threshold is that sellers must have actually charged the ‘was’ price that is presented in the special offer for a period of three months prior to that special offer.

Earlier this year, ACM systematically monitored the online special offers of 250 popular products (toys and consumer electronics) in 25 online stores for several months. ACM saw that online stores often presented special offers that were not genuine special offers. In some cases, these were long-term promotions (products that were presented as ‘special offer’ for the entire investigation period), while in other cases, the ‘was’ price was a price that had not been charged recently or had never been charged at all. ACM uses this survey as the prelude to enforcement of the new rules in 2022.

New rules in 2022

In mid-2022, new rules regarding price promotions will come into effect. The ‘was’ price (also referred to as the reference price with which the ‘now’ price is compared) must be the lowest price that the trader has charged for 30 days prior to the special offer. This is meant to prevent businesses from charging a high price for a very short period of time prior to the special offer, and thus presenting the price advantage for consumers in too positive a light. The new European rules allow for several national exceptions to this new standard, for example for perishable products with a short shelf life, and for cumulative discounts on the same product. The new standard is much clearer for businesses and consumers, thereby enabling ACM to enforce this standard more effectively. Special offers will thus have more value to consumers, because the presented price advantage will soon represent more closely the actual price advantage for consumers. The new rules, which follow from European rules, will be incorporated into the Dutch Prices Act. ACM will enforce compliance with those new rules, starting in May 2022 when they come into effect.

Rules for online selling

Online stores must also comply with other rules if they offer products to consumers online. ACM has compiled an overview of the most important rules for businesses. Consumers that make online purchases can check the trustworthiness of the online store using the checklist ‘Check before you buy’.

See also

Checklist for online selling (in Dutch)

11-11-2021 ACM launches awareness campaign on safe online shopping: ‘Check before you buy’