There are two main sources of fair advertising laws, the federal government and individual states. Unfortunately, this leads to a mosaic of different perspectives that are difficult, if not impossible, to reconcile. Federal policies are set out in the Code of Federal Regulations (available on the website: and may be enforced by the Federal Trade Commission (FTC). The FTC is an independent agency of the U.S. government whose primary charter is to promote consumer protection and eliminate and prevent anti-competitive business practices. The relevant section of the Code of Federal Regulations is entitled “Guides Against Deceptive Pricing” (“The Guides”). However, the FTC is not currently acting to enforce the guidelines and has not done so since the Nixon administration. Instead, the federal government has relied on individual states and class action lawsuits to force retailers to comply. The guides provide useful guidance on pricing practices, but they are so vague that they are open to interpretation. Let`s take a look at these nuances. This Consumer Notice provides information in response to questions about pricing requirements and excess fees for scanners under the Scanner Act.

However, paying the difference between the amount charged and the displayed price is essentially a price adjustment and therefore non-refundable in certain circumstances (i.e. if the retailer has calculated the exact minimum selling price). Given that alcohol is not an exempt item under the Procurement Reform and Modernization Act and that Parliament is presumed to be aware that another statute (the Alcohol Control Code) requires certain prices for alcohol, this conclusion interprets Parliament`s intent when the statutes are read together. Third, retailers should always strive to act in good faith with respect to pricing. The use of downright misleading price comparisons, or even those in the legal grey area, can bring short-term benefits, but has repeatedly shown negative long-term consequences. Summary pricing tends to hurt brand perception and add a touch of quackery to a retailer`s reputation. In addition, scientific studies show that implausible reference prices have no measurable influence on consumer price perception. [7] This should reduce the temptation to quote a falsified reference price to claim an 80% savings. Even worse, exposure to an implausible reference price can lead the customer to buy the item they want elsewhere because the entire pricing structure of the item – or worse, the entire assortment – is questioned at that retailer.

Companies that intentionally post false prices or otherwise exploit bait and change prices may be held liable under federal and state consumer protection laws. Consumers should direct complaints about alcohol prices to the Michigan Liquor Control Commission`s Law Enforcement Division by calling 517-284-6330 or writing to the Michigan Liquor Control Commission, 525 W. Allegan, P.O. Box 30005, Lansing, MI 48909. Violations can be reported by calling the toll-free helpline 866-893-2121. A: No. Adjusting competitors` prices can be good business and often occurs in highly competitive markets. Each undertaking is free to set its own prices and may charge the same price as its competitors, as long as the decision is not based on an agreement or concertation with a competitor. Second, retailers should develop concise policies or guidelines that prescribe comparative pricing practices. These guidelines should comply with applicable laws in a manner that reduces or minimizes the risk of legal action, as recommended by their lawyers. These guidelines should specifically address the different types of price comparisons used in advertising, whether it is the previous price of an item, the prevailing market price, or an MSRP (list price). In addition, those rules should specify the minimum period during which an item must be offered for sale at an unreduced price for the discount right to be valid.

It is illegal for a seller to make false or misleading statements about a product or service or to conceal information about it in order to convince you to buy it, sell goods “as is”, pass off a used product as new, or for them to try to sell an item using a tactic called “bait and change”. The lawsuit alleged that customers had been deceived by these retailers (Kohl`s, Macy`s, J.C. Penney and Sears) by making them believe that the discounts they had received were greater than they really were. In a public statement, Los Angeles Attorney General Mike Feuer said, “Customers have a right to know the truth about the prices they pay and whether a good deal is really a good deal.” This event highlights a very real and growing risk for retailers: that their advertising practices could expose them to lawsuits. LexisNexis® and Bloomberg Law are external online distributors of ALM`s extensive collection of current and archived versions of legal news publications. LexisNexis® and Bloomberg Law clients may access and use ALM content, including content from the National Law Journal, The American Lawyer, Legaltech News, New York Law Journal and Corporate Counsel, as well as other sources of legal information. Reprinted with permission from the January 25, 2022 issue of “The Legal Intelligencer” © 2022 ALM Media Properties, LLC. All rights reserved.

Further reproduction without permission is prohibited. For more information, call 877-257-3382, or visit In December 2016, the Los Angeles District Attorney`s Office announced it would prosecute four national retailers for fraudulent pricing practices. While there are a number of exceptions to a price tag on each item, stores can also be penalized for any missing shelf price tag. For more information on Massachusetts` item pricing law, see M.G.L. Chapter 94, Section 184 B, C, D, and E. The guides provide parameters for different types of price comparisons. The first is a comparison of a current price with a previous price. This affects most “what/now” prices as well as requests for percentage and dollar savings. The key passage dealing with previous price comparisons reads as follows: Created by FindLaw`s team of writers and legal writers| Last updated March 24, 2020 *The Attorney General issued a warning to consumers about price reductions after the COVID-19 pandemic, stressing that price reductions are unscrupulous and that any price reductions resulting in illegal profits will be pursued. However, it is not enough to develop a declaration of principles. Marketers and marketers need to be trained in these pricing practices.

Compliance with the pricing policy should be integrated into the promotional planning and development process. To support compliance, retailers should conduct regular audits of internal pricing practices and develop corrective actions and training as required. Again, the chatter is incredibly vague. The term “significant number of sales” is not clearly defined, leaving the door open to interpretation. However, retailers should be aware that references to savings on list prices or MSRP should only be considered legitimate if sales at that price have recently been made in the market. This saying is widely violated, although the auto industry, where cars are almost never sold at the MSRP, circumvents legal problems by not announcing specific prices. A: A uniform and simultaneous price change could be the result of price fixing, but it could also be the result of independent commercial responses under the same market conditions. For example, if conditions in the international oil market lead to an increase in the price of crude oil, this could lead to an increase in the wholesale price of gasoline. Local gas stations can respond to rising wholesale prices by raising their prices to cover these higher costs. Other market forces, such as the publication of list prices (as is often the case at most gas stations), encourage suppliers to quickly adjust their own prices to avoid losing sales. However, if there are indications that the service station operators discussed price increases among themselves and agreed on a common tariff plan, this may constitute an infringement of the cartel. Car Buying Service Build and buy thousands of MSRPs with initial dealer pricing information and a seamless car buying experience.

This is a factual question that a court is best placed to answer. A store cannot knowingly charge or attempt to charge a price higher than the displayed price for that item. Therefore, the consumer may have a claim if the store does not sell the item at the displayed price. However, the consumer may encounter obstacles in convincing a court that the transaction knowingly charged the higher price if the pricing error is unintentional and results in an obvious stroke of luck for the consumer. While the express warranty requires you to pay for shipping, you should expect to get what you paid for at no extra cost. If neither the retailer nor the manufacturer catches up with you, you may be able to cancel the sale under the implied warranty of merchantability. Again, a chargeback or the threat of legal action could help. Example: A group of competing optometrists agreed not to participate in an eye care network unless the network increased reimbursement rates for patients covered by its plan. Opticians refused to treat patients who fell under the network plan, and eventually the company increased reimbursement rates. The FTC stated that the optometrists` agreement was an illegal price-fixing agreement and that its officials had made efforts to ensure that other optometrists were aware of the agreement and complied with it. Corroboration is the process of gathering extrinsic evidence to support any allegation made in a proposed advertisement in the event of a government investigation or litigation.