Guidelines for Marketplace Sellers
Setting prices and getting your advertisements right are always an important issue for any business.
One of the common techniques used by many retailers is to compare the price they sold their product for in the past, with the price they're offering it for now.
This is called two-price advertising, however it’s more commonly known as ‘was/now’ or ‘strikethrough’ pricing.
On Catch.com.au, we facilitate advertising such discounts through the use of the “Price Drop” promotion tool. This feature allows you to show ‘strikethrough’ style pricing per the example below:
In this example, $18 represents the price that the item had been selling for prior to the Price Drop being applied, and $15.30 represents the current sale price.
‘Was/now’ or ‘strikethrough’ style pricing can help you attract customers, but if not done correctly, it can result in misleading customers and falling foul of the Australian Consumer Law leading to significant consequences including Catch suspending or removing your store, regulator action and fines and penalties. When using our platform, it is your responsibility to ensure your advertising and pricing practices remain compliant with the law.
If you use ‘strikethrough’ style pricing via the ‘Price Drop’ tool, you must take care not to mislead consumers about the savings they're going to get by ensuring that the item sold for the ‘now’ price, has been available to consumers on Catch.com.au for a reasonable period of time, and sold in reasonable quantities at the ‘was’ price immediately before the discount was applied.
Let’s look at an example:
Suppose you advertise a product on Catch.com.au with a ‘strikethrough’ price of $29.99 and a current or ‘now’ price of $9.99. If you have already sold a reasonable number of products at the old, ‘strikethrough’ price of $29.99 over an extended period and now offer it at the discounted price of $9.99, then your advertising is unlikely to raise concerns. But there are some instances when such an advertisement is likely to be misleading. Exactly when depends on the circumstances, and there’s a range of information you need to consider. For example, if you never offered the product for sale at the 'strikethrough’ price, then you’ll certainly be misleading customers about the savings they can make.
A second question you need to ask yourself is how long you actually sold products for at the ‘was’ price. As noted, law requires products to be sold in reasonable quantities and for a reasonable period of time at the ‘was’ price, immediately before the discount is applied.
What’s reasonable will vary in every case, but if you can’t show sales at the original ‘was’ price, or if it was only sold at the ‘was’ price for 48 hours prior, then using ‘was/now’ pricing for that product is risky, because it’s likely to be misleading.
To place some control on this, the ‘Price Drop’ tool is restricted by only allowing a price drop to be applied if the product has been listed at the previous, ‘strikethrough’ price for a period of 2 weeks or more, immediately before the discount is applied.
It may be used up to a maximum of 2 weeks consecutively. If you are using the price drop tool for the maximum period, you will need to take into consideration how long your products have been offered at the ‘was’ price. The price drop should not run for a longer period than the pre-discount price. For example, if the product was listed at the ‘was’ price for 2 weeks, the price drop should only run for a maximum of 7 days.
Remember, it is each seller’s responsibility to ensure they comply with the requirements of the Australian Consumer Law the before using this feature.
More information on displaying prices can be found on the ACCC website at the following link: https://www.accc.gov.au/business/pricing-surcharging/displaying-prices
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