Misleading two-price comparisons under attack
The ACCC has been vigorously pursuing companies that quote misleading higher prices in comparison to so-called sale prices.
Two-price advertising, often called comparative price advertising, contrasts the sale price with a higher price for the same or a similar product. It usually takes one of four forms: recommended retail price, ‘was/now’ advertising, strike-through and competitor price advertising. A powerful marketing tool, it generally doesn’t offend Australian consumer law if the overall impression created is genuine. Any price comparison must not be illusory.
Ads risk breaching the law if the calculated saving is based on the difference between the current sale price and a higher price at which the product has not actually been sold for a reasonable period of time and in reasonable quantities immediately before the date of the ‘discount’.
Whether conduct is misleading or deceptive is largely determined by the overall impression created in the minds of consumers. A fine-print disclaimer may not be enough to stop consumers being misled over the true nature of savings.
A significant number of ACCC investigations into advertising practices conclude in companies making enforceable undertakings to take corrective advertising, implementing compliance programs and acknowledging the undertakings will be available for public inspection.