Price reductions FAQs

Response

If the lowest price of the bed was €3,000 in the 30 days before the sales campaign, then the prior price shown will be €3,000 when announcing the price reduction of the bed to €2,000.

If the price reduction lasts longer than 30 days without interruption, the prior price to be indicated remains the lowest price applied during at least 30 days before the price reduction.

For example, a bed on offer for €3,000 for two months can be put on sale for six weeks at €2,000 using the €3,000 as the prior price, if €3,000 was in fact the lowest price applied during at least 30 days before the price reduction.

Please note that excessively long price reduction periods in comparison with the time when the good is sold at the ‘full’ price may constitute a misleading commercial practice. The CCPC’s view is that an accepted practice would be to allow the reduced price for only so long as the product had been at the elevated previous price.

Note also that where a trader continues to make successive reductions – without interruption – to the price of the bed, then the prior price shown should be the lowest price in the 30 days before the first reduction was applied.

Response

As noted on page 6 of our business guidelines, you are not required to say how long the prior price had been applied for. If a price reduction lasts longer than 30 days, the prior price is still the lowest price at least 30 days before the reduction was applied. Please note that under the Consumer Protection Act 2007, if you have stock with reduced prices, you have to have had the products on offer at the advertised original price for a reasonable period before the price was reduced.

The definition of “a reasonable period” is not specified by law, but the CCPC’s view is that an accepted practice would be to allow the reduced price for only so long as the product had been at the elevated previous price. For example, a product for sale at €100 for four weeks should only be advertised at the reduced price for no longer than four weeks.

Response

The new regulations focus on promotional statements in respect of goods offered for sale to consumers, where the trader makes a price reduction announcement to customers in general. It does not cover, however, individualised or personalised price reductions which are dependent on a negotiation with the individual customer or on other circumstances which have not been announced in advance.

If the individualised price reduction is exclusive to one customer and has not been announced to customers in general, then it is likely that this would fall outside the scope of the new regulations. On the contrary, the new rules apply to announcements that create the impression of a price reduction, even in instances where the price reduction announcement does not include a measurable price reduction. For example, the new rules apply to announcements such as “sale price” or “special offer”. In such cases, the individual goods covered by the announcement must display the prior price i.e. on the respective price tags.

Response

If the coat was first reduced on the 10 October for the first time, then this would be considered the beginning of the price reduction campaign.

If the price reduction of the coat was applied on the 10 October, then the prior price of this coat in this price reduction announcement will be the lowest price applied in the previous 30 days. If traders continue to make successive reductions, without interruptions, to the price of the coat, then the prior price shown should be the lowest price in the 30 days before the first reduction was applied.

When making price reduction announcements, trader can extend a reduction to a good as long as it is clear to the consumers that it is not a new campaign.

As noted on page 6 of our business guidelines, you are not required to say how long the prior price had been applied for. If a price reduction lasts longer than 30 days, the prior price is still the lowest price at least 30 days before the reduction was applied. Please note that under the Consumer Protection Act 2007, if you have stock with reduced prices, you have to have had the products on offer at the advertised original price for a reasonable period before the price was reduced.

The definition of “a reasonable period” is not specified by law, but the CCPC’s view is that an accepted practice would be to allow the reduced price for only so long as the product had been at the elevated previous price. For example, a product for sale at €100 for four weeks should only be advertised at the reduced price for no longer than four weeks.

Response

Announcements that create the impression of a price reduction are subject to the new rules, even when the price reduction announcement does not include a measurable price reduction. For instance, the new obligations apply to announcements such as “sale price” or “special offer”. In such cases, the prior price has to be indicated for the goods concerned by the announcement.

In a general price reduction announcement (e.g. 20% off on all Christmas decorations this week announced on a physical banner or online communication), the prior price does not have to be indicated on the same medium as the price reduction announcement itself. However, the individual goods covered by the announcement must display the prior price i.e. on the respective price tags in shops or price sections in online shop interfaces.

Response

The new regulations do not contain specific rules for the practice of displaying the recommended retail price (RRP). Please note, however, that in addition to the new rules on price reduction announcements, the Consumer Protection Act 2007 also contains a number of provisions around unfair and misleading commercial practices that may apply.

Traders comparing their prices with the RRP, whether or not in combination with price reduction announcements, must pay utmost attention to ensure that consumers are not misled.

If the RRP is not the prior price (i.e. the lowest price at which the goods were offered for sale in the previous 30 days before the price reduction was announced) and a trader makes a price reduction announcement, then the trader must clearly differentiate between the RRP and the prior price.

If a reference to an RRP is included in a price reduction announcement, this must be clearly explained, must not create confusion and must not detract the consumer’s attention from the indication of the prior price.

When a consumer looks at a sale announcement they must be able to easily evaluate the price and understand the level of discount compared with the prior price. Where, due to its misleading presentation, a comparison with the RRP is actually perceived by the average consumer as being a price reduction, such practice may be in breach of both the new regulations, due to the incorrect presentation of the prior price, and the Consumer Protection Act 2007.

Question 6

Response

A promotional statement by a trader announcing a price reduction (e.g. ‘Reduced Price’ sticker) must be accompanied, in that announcement, by the prior price of that product. If this cannot be done because the product was not offered for sale at a prior price, the trader must refrain from making a price reduction announcement.

As pointed out in the CCPC Guidelines, “a price reduction announcement is any promotional statement made by a seller outlining that it has reduced prices for goods”. In such cases, the prior price must be displayed, i.e. “the “lowest price […] applied to a product no less than 30 calendar days before applying a price reduction”.

Since traders might want to negotiate an advantageous price with their suppliers or source their products elsewhere at a more competitive price, it is permissible for traders to promote their price advantage (e.g. by comparing their prices with those offered by competitors, or the manufacturer’s RRP), provided that any such price comparison is accurate, clearly explained and does not mislead or create confusion among consumers.

Equally, it is imperative that price comparisons (e.g. references to the RRP) are not presented in a manner that may create the impression of being the prior price, unless the trader actually offered the goods at that price (within the meaning of ‘prior price’ in the Regulations).

Response

The prior price used in a price reduction announcement must be the lowest price applied to a product during the period of not less than 30 days before the price of the product was reduced. However, where successive reductions are gradually applied one after the other, without interruptions, as part of the same sales campaign, it is permissible to show the lowest price applied in the 30 days before the first price reduction was applied.

An example of this can be found under the ‘Prior Price and Sales Campaigns’ section on page 8 of our business guidelines – ‘The lowest price of a duvet in the 30 days before the sales campaign started was €40. The shop shows €40 as the prior price when it announces the first reduction, 10% off. They must use the same prior price when announcing and applying successive reductions of 20% and 30%.’

For more information about sales campaigns and the duration of price reduction periods, please see pages 6 to 8 of our business guidelines.