The Dutch Authority for Consumers & Markets (ACM) has imposed fines totaling €621,000 on five online retailers for using misleading discounts. These retailers advertised multiple products with discounts based on deceptive "from-prices." As a result, consumers were shown fake discounts. In reality, no discount was given, or the discount was lower, thus misleading consumers.
Cateautje Hijmans van den Bergh, ACM board member, stated, 'The price is one of the most important features of a product on which consumers base their purchasing decisions. Fake discounts make consumers think they are getting a good deal when that is not the case. Consumers need to be protected against this. The fines we are now imposing send an important signal that this must stop.'
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Since January 1, 2023, the ACM has been monitoring stricter rules for "from-to" prices. The principle is that a discount can only be given based on the lowest price for which the product was offered in the 30 days preceding the discount.
Additionally, the ACM fined three more companies that acknowledged their violations and promised improvement. Thus, they received lower fines. G-star (www.g-star.com) was fined €110,000, JYSK (www.jysk.nl) €112,500, and Tommy Hilfiger (nl.tommy.com) €105,500.
What did the companies do wrong?
The ACM observed that companies repeatedly offered products with fake discounts. According to the law, companies must show the lowest "from-price" that was applicable in the 30 days before the discount. By showing an incorrect "from-price," consumers believe they are receiving a higher discount than they actually are. In some cases, there was no discount at all, but a price increase.
One company presented a product "from" €699 "for" €629, while the product had cost €539 during an earlier promotion within the preceding 30 days. The incorrect "from-price" made the consumer think there was a discount when the product had actually become more expensive. This is a fake discount.
Another company created a fake discount by artificially increasing the "from-price." A product was offered "from" €149.99 "for" €99.99. A day later, the same product was offered "from" €199.99 "for" €99.99. By raising the "from-price," the discount appeared larger. The incorrect "from-price" of €199.99 was never used as a selling price during the examined period.
In recent months, the ACM has monitored discounts from online sellers in sectors such as clothing, consumer electronics, and specialty bedding stores. The companies with the most violations have now been fined. The ACM will hold warning conversations with all examined companies that did not comply with the "from-to" pricing rules in the coming period.
In the future, the ACM will continue to investigate clear pricing and fair discounts. It is important for consumers to trust the price information they find. Companies must be honest about the prices and discounts they offer and must not mislead consumers. It is also a form of unfair competition if companies with clear prices compete with companies with unclear prices.
More information:
Autoriteit Consument & Markt
www.acm.nl