Retailers now using recommended price to mislead consumers with discounts

After the Netherlands banned retailers from increasing prices shortly before offering discounts to make their deals seem bigger, they’ve now turned to using “recommended retail prices” to achieve the same effect, according to the Consumentenbond.

Since the start of this year, the original price shown on a discount promotion must be the lowest price the seller used 30 days before the offer. Retailers quickly found a way around this by now showing the recommended retail price instead of the original price, according to the consumers’ association.

“This way, a retailer can increase his price from €400 to €500 and still advertise a 50% discount. Because if the suggested retail price is €1,000, that is allowed. The retailer is not breaking the law. So something is wrong here,” said Consumentenbond director Sandra Molenaar.

The consumers association kept track of the prices of 100 large webshops and 20 drugstores and supermarkets for three months. It found many ads with the suggested retail price crossed out to show a massive discount.

For example, Henkel and Unilever advertise discounts on Bol.com of up to 70 percent, “forgetting” to report that the discounts “are related to extremely high recommended prices, which they determine themselves, and are never charged,” Consumentenbond said. Coolblue made a discount on a Samsung TV, from €699 to €649, look better by showing the suggested retail price of €799.

“Screens with recommended prices are sheer nonsense,” Molenaar said. “These prices are almost never charged and are also not relevant to consumers.” The association urged the government to also ban discounts based on recommended retail prices and “elsewhere” prices when evaluating the law next year.