"Was $X, Now $Y" - Comparative Pricing In Advertising: Just The Facts

Comparative pricing is a powerful sales tool. However, many franchisors, retailers and suppliers are currently using it incorrectly and are unknowingly at risk of prosecution for breaching the Trade Practices Act (TPA).

Comparative pricing is commonly seen in the following forms:

• straightforward comparisons, such as "was $X, now $Y"

• strikethrough comparisons, such as "$X $Y"; and

• percentages discounts, such as "X% off".

As recently stated by Acting Chairman of the ACCC Mr Peter Kell, when using comparative pricing, "...retailers must ensure that the claimed savings are genuine or they run a serious risk of breaching the law". Specifically, if retailers use comparative pricing incorrectly, they may engage in misleading or deceptive conduct (or conduct that is likely to mislead and deceive), or make false price representations, in breach of sections 52 and 53(e) of the TPA respectively.