Stores must stop deceptively raising prices right before putting an item on sale
The Netherlands is banning misleading discounts as of 1 January 2023. From then, retailers won’t be allowed to increase a product’s price just before lowering it to the previous amount and presenting it as a discount.
The practice is often used in “was/now” pricing, sometimes called “strike-through” pricing, when an original price is crossed out in marketing materials. It can be used legitimately to advertise discounts but can also be abused when a retailer artificially inflates the price shortly before a discount is applied. It psychologically tricks consumers into thinking they are getting a good deal when in reality, they are not.
The deceptive pricing strategy may also be utilized when trying to get consumers used to the idea of paying higher “regular” prices when a sale has ended.
“An attractive price reduction that actually turns out not to be that at all is misleading. Many consumers have faced false ‘was/now’ discount promotions,” Minister Micky Ardiaansens of Economic Affairs and Climate said. The new rules stipulate that the original price from which the discount is deducted must be the lowest price the seller quoted in the 30 days before the discount.
According to Adriaansens, the ban is also good news for entrepreneurs who face unfair competition due to this practice. “And with this measure, sellers can, of course, continue to set their own prices and offer real discount campaigns.”
The new rules are based on the EU directive, though the Dutch government decided to add some exceptions. Sellers in the Netherlands will still be allowed to offer successive discounts, for example, giving a 20 percent discount on a piece of clothing, then 30 percent, and then 50 percent. In this case, the seller can refer to the price at which the first discount was offered for up to three months. Products that have been on the market for less than 30 days will be excluded.
Exceptions will also apply to products that have a limited shelf life. “This includes perishable foodstuffs like fish, meat, dairy products, fresh fruit, and vegetables, which are only available for a few days and whose prices can change quickly,” the Ministry said. “It is impractical for sellers to track the price of these during that time. Moreover, from a sustainability point of view, it is important that price reduction rules help to prevent food waste.”
