Discount Battle on Black Friday: What is Allowed by Law

In light of increased controls on discounts and price labeling, the calculation of discounts during the promotional days around Black Friday is coming into focus. Discounts must be based on the lowest price of the last 30 days, but there are exceptions. Rainer Will, Managing Director of the Trade Association, identifies "sham discounts" especially among online retailers from Asia and the USA.

Discount Calculation on Black Friday in Focus

Retailers with a business location in Austria must adhere to a "very complex" law, said Will at an online press conference on Monday. With the amendment of the Price Indication Act (PrAG) in the summer of 2022, an EU directive was implemented. Since then, according to Paragraph 9a of the PrAG, retailers must indicate the "previous lowest price" for price reductions, which was demanded at least once within 30 days before the announcement of the price reduction in the same sales channel. The law firm Taylor Wessing has created a 16-page guide "Advertising Correctly with Discounts" for retailers on behalf of the Trade Association. There are legal exceptions, among others, for perishable products if the price reduction is due to the expiration of the minimum shelf life date and for products with a short shelf life.

Legal Situation Complex from Retailers' Perspective

According to the Trade Association, price comparisons with the prices of other entrepreneurs, general marketing communications such as "best -" or "lowest price," and announced price reductions through customer cards and loyalty programs are exempt from Paragraph 9a of the Price Indication Act. In price comparisons, there is no need to indicate a "previous lowest price" if only a non-binding manufacturer's suggested retail price (MSRP) is compared. The legal situation is complex from the retailers' perspective because the legislator did not include the exceptions in the legal text but only addressed them in the explanatory notes to the law.

VKI Sues Major Supermarket Chains

The topic of discounts is a major issue in light of the significantly increased food prices: The Association for Consumer Information (VKI) has sued the supermarket chains Billa, Spar, Hofer, and Lidl on behalf of the Ministry of Social Affairs for "misleading discounts." The companies are accused of not fulfilling their obligation to indicate the lowest price of the last 30 days for discounts. The first days of hearings in this case will take place in December and January at the Commercial Court in Vienna. Economic Minister Wolfgang Hattmannsdorfer (ÖVP) also announced a "sharp action" in the food trade in the fall to intensify the control of discounts and price labeling. Until then, controls and penalties around the Price Indication Act had been rather restrained, according to legal representatives.

Sham Discounts and Small Footnotes

Price reductions are displayed differently by retailers: For example, the US retailer Amazon bases many of its discounts during the Black Week promotional days on the MSRP. A coffee roaster in this country indicates the lowest selling price of the last 30 days compared to the promotional price in an extremely small font size.

(APA/Red)

This article has been automatically translated, read the original article here.