Pricing
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Clarity in pricing requirements deal with how businesses may use ‘component pricing’ (specifying the price for each part of a good or service separately) when advertising their products.
The requirements are contained in section 48 of the ACL and require that where a person, in trade or commerce, makes a price representation that is less than the total price required to be paid for the goods or service involved (a component price), then the person must also specify in a prominent way and as a single figure, the single price for the goods or services.
To be sufficiently prominent, it must be ‘at least as prominent as the most prominent’ of the partial price representations. This prevents, for example, car companies specifying a price ‘plus on-road costs’. Therefore, although component prices are not prohibited, the full price must be prominently displayed.
The Commonwealth minister can exempt certain industries from the requirement to display a single price; it has been determined that restaurants and cafes are excluded from the requirements, which allows them to impose surcharges (e.g. on public holidays).
Amendments made to the ACL in 2018 ensure that all ‘pre-selected options’ are included in the single price. This overcomes the practice of consumers being charged a higher price if they do not specifically de-select options that have been pre-selected (e.g. for luggage on an airline website). Therefore, the headline price has to include all charges automatically applied by the seller, even though, during the transaction, the customer may de-select these options.
The provision also requires a person to specify the minimum amount required to be paid for sending goods to the customer, where this price is known at the time of the price representation. However, this may be listed as a separate figure and it does not have to be included in the single specified price.
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Unit pricing allows consumers to quickly compare the value of similar products of varying size and brands. Regulations make it compulsory for some grocery retailers to display a unit price on store labels and in advertising where a selling price is displayed. See Competition and Consumer (Industry Codes – Unit Pricing) Regulations 2021 (Cth).
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It is common for some businesses, particularly in the airline and ticketing industries, to impose a surcharge on card payments. Since September 2017, excessive surcharging of credit, debit and prepaid card payments has been banned.
The purpose of the ban is to stop businesses from charging surcharges that are more than what it costs to process the payment.
The Reserve Bank of Australia (RBA) publishes a standard that relates to the surcharges businesses charge customers when paying by credit or debit cards. The new law states that a surcharge is excessive if it is more than the amount permitted in the RBA standard (C&C Act s 55B).
The ACCC is empowered to enforce the ban.
Pricing
Chapter: 7.2: Consumer protection laws
Contributor: Stephen Nowicki, Director of Legal Practice, Consumer Action Law Centre
Current as of: 1 September 2024
Law Handbook Page: 625
Next Section: Lay-by sales
