Everybody loves a good bargain, and we’re no exception.
It’s for just this reason that the Commerce Commission (or ComCom for short) are around, keeping an eye on the way retailers use discount pricing.
Amongst other things, ComCom are tasked with enforcing the Fair Trading Act, which prohibits traders from making misleading representations with respect to price.
So what’s misleading?
There are a bunch of behaviours that could be considered misleading, but the main theme is that the discounts you advertise need to be genuine. This means that if you want to advertise a discount, this needs to be done based on an ordinary price that you regularly use.
For example, you can’t just list a product with a 50% off label for the purpose of attracting buyers. This is misleading behaviour if not based on real, commonly used prices.
If you don’t use discount pricing appropriately, chances are you’ll get a letter from ComCom with a big please explain attached, and it’s not uncommon for this kind of thing to lead to some pretty hefty fines.
How does Trade Me deal with discount pricing?
We’re all about the sales at Trade Me, and we love to see our members getting great value on the site.
We also make it easy for members to advertise by providing a feature that sellers can use to display what the price used to be, alongside the new, discounted price.
But, like ComCom, we don’t want people using discount pricing inappropriately.
So, off the back of some recent media around the subject, we’ve chosen to implement some clear rules for advertising discount pricing on Trade Me.
The rules around using was/now pricing on Trade Me
- The ‘was’ price must have previously been offered on Trade Me by the member advertising the discount. It cannot be an RRP or valuation, unless the member has previously offered the goods on Trade Me at that price.
- The ‘was’ price must have been offered on Trade Me for a minimum of 28 days before a discounted ‘now’ price can be advertised.
- Discount prices should only be offered for a maximum of 28 days. In other words, the ‘was’ price becomes out of date if has not been offered in the last 28 days, or the ‘now’ price becomes the ordinary price if it has been offered for more than 28 days.
- Members can only offer consecutive discounts on the same item if they are further discounting the price. The previous "now" or sale price must be used as the new "was" or original price. Members can't offer the same discount on consecutive listings.
- New members may not have ‘was/now’ pricing enabled until at least 28 days have passed since their registration.
- An allowance of 3% will be permitted for international marketplace sellers using ‘was/now’ pricing to account for currency fluctuation.
Yeah, it can be – but it’s an easy fix!
If you haven’t updated your pricing in the last month, it’s worth going through your listings to make sure that the discounts you’re offering follow these new guidelines. Our Trust & Safety team look after this kind of thing too, so don’t be surprised if you are contacted by them directly to let you know if your pricing is out of date.
Just remember, at the end of the day all we want to see is our members offering, and receiving genuinely good value.
For more information on pricing, check out ComCom’s pricing fact sheet, or drop us a line. We keep the lights on 24/7.