On 7 December 2016 the Chartered Trading Standards Institute (“CTSI”) published its paper entitled ‘Guidance for Traders on Pricing Practices’, at the request of the Department of Business, Energy and Industrial Strategy (“BEIS”) and the Consumer Protection Partnership (which was formed in 2012 with the task of enforcing and giving guidance on UK consumer protection laws). The publication of the latest guidance, which replaces the 2010 Pricing Practices Guide (the “2010 Guide”), has been prompted by a recent series of consumer complaints focused on misleading practices, and a super-complaint from the Consumers Association (‘Which?’) which was thoroughly investigated by the Competition and Markets Authority (“CMA”). In reaching a conclusion on the matter, the CMA recommended that a series of measures be implemented to give shoppers increased confidence and clarity when seeking a fair deal in their retail activities.
Whilst the new guidance is not of itself legally mandatory, it does provide traders with helpful, common-sense advice on pricing and practical examples which should go a fair distance in indicating compliance with the various pieces of consumer protection law, most notably the Consumer Protection from Unfair Trading Regulations 2008 (the “Regulations”). Covering all platforms used for business-to-consumer commercial practices, the guidance may be referred to by regulators and courts alike when carrying out an assessment of the pricing practices of traders in the United Kingdom and indeed determining whether the law has been breached in any way.
The new guidance builds on the advice contained in the 2010 Guide, providing first-hand examples of trader good practice, and various ‘Dos’ and ‘Don’ts’ for key areas of compliance. The paper is intended to be more visual and user-friendly than its predecessor, giving traders pictorial examples of price tags and offers which either comply with, or infringe, the underlying Regulations. This should, it is hoped, further increase compliance with the Regulations.
CTSI’s publication also contains several new or revised guidelines that should be noted carefully by traders or retail businesses. These include:
- A prohibition on applying credit or debit card fees to consumer orders or purchases which exceed the cost of these fees to the trader;
- A prohibition on the use of default options such as tick-boxes in order to secure consumer consent to additional fees or charges;
- The requirement for substantiation when referring to the much debated ‘recommended retail price’, which will be important to ensure that any price saving advertised reflects a genuine saving;
- New advice in relation to volume offers (including ‘multi-buy’ promotions, combination offers and ‘extra for the same price’ deals); and
- Guidelines for subscription services tying consumers into repeat payments.
One final change of note from the 2010 Guide is in relation to ‘Up to X% off’ and ‘From…’ claims. In the earlier guidelines such pricing strategies could be used as long as the claim applied to at least 10% of the range of products on offer at the time, however under the new guidelines these pricing claims may only be used if the maximum reduction quoted applied to a significant proportion of the range of products included in the promotion. This has the potential quite drastically to change the use of this individual pricing strategy.
According to CTSI’s official press release, traders are likely to be given until April 2017 to adjust to the new guidance, when enforcement bodies will assess whether or not clear, honest and up-front pricing strategies beneficial to both consumers and businesses alike are being employed by traders across the United Kingdom. Accordingly, in light of the recently published guidance, traders and businesses should ensure that they review their pricing practices and reassess their fairness with a view to meeting, if not exceeding, the expectations laid out in CTSI’s publication.
To download the guidance in full click here.