Businesses have certain rights and responsibilities when setting and displaying the prices of their goods and services. When you price your products or services, or advertise a price, you need to comply with a number of regulations. Below are a few terms to become familiar with.
Comparative pricing – Comparative pricing is where you compare the sale price of a product or service to a former price.
Recommended Retail Price (RRP) – RRP is only a recommendation to the re-seller. It’s illegal for a supplier to pressure a re-seller into selling their products at or above a certain price, or threaten to cut off supply if their price demands are not met.
Price fixing – Price fixing is where two or more competitors agree on setting prices. Price fixing is illegal in Australia. This can be often confused with parallel pricing, which is a legitimate way of setting prices.
Multiple pricing – Multiple pricing is when a good is advertised with more than one displayed price. Typically, this is done in error. Under consumer law, a business must either sell the goods at the lower price, or withdraw the good from sale until the price is corrected.
Unit pricing code – Unit pricing is when a per unit price is calculated for a product using a standard measurement such as litres or grams. Unit pricing allows customers to compare the price and value of similar types of products. Under the unit pricing code it is compulsory for grocery retailers to display both a product price and a unit price for certain grocery items.
Different pricing for payment methods – Charges for different payment methods (e.g credit card surcharge) must be clearly labelled.