Displayed price reductions are a powerful marketing tool for businesses. It is therefore only logical that the rules governing such displays are strictly regulated by the Belgian Code of Economic Law and subject to close scrutiny by the FPS Economy.
What Is Meant by a “Price Reduction”?
A price reduction is deemed to be announced when a business advertises a directly measurable discount (for example: “–30%” or “–€50”) or creates the impression that a discount is being applied (for example: “special offers”, “promotion”, etc.).
By contrast, the following do not qualify as a price reduction display:
- general claims such as “the lowest prices”;
- combined offers such as “buy one, get one free”;
- loyalty programmes.
Which Rules Apply to the Display of a Price Reduction?
When announcing a price reduction, a business must explicitly indicate the previous price to which the reduction applies. This is commonly referred to as the reference price.
This reference price must be the lowest price applied during the thirty days preceding the implementation of the price reduction.
For example, if you wish to apply a 50% discount to a product currently sold at €200, but that product was sold at €180 twenty days earlier, the reference price must be €180 and not €200.
Are There Any Derogations or Exceptions to the Price Display Rules?
The rule described above is subject to various derogations, exceptions and nuances, including:
- perishable goods;
- “new products” sold for less than 30 days;
- differentiated online and offline prices;
- comparison with the supplier’s “recommended” price;
- various sales periods;
- etc.
A thorough understanding of these subtleties allows businesses to adapt their price displays effectively, attract consumers and remain compliant with the law.
What Are the Sanctions for Non‑Compliance with Price Display Regulations?
The FPS Economy actively monitors compliance with the rules governing the display of prices. Severe sanctions are provided by the Code of Economic Law in the event of infringement.
Your company may face fines of up to €80,000 (or 4% of annual turnover if this amount is higher), or even €400,000 in cases of bad faith (or 6% of annual turnover if this amount is higher).
Competitors may also bring injunction proceedings for unfair commercial practices.
Our advice:
Do you have further questions regarding the rules on the display of price reductions?
Are you subject to an inspection by the FPS Economy and wish to be assisted?
Is one of your competitors failing to comply with the applicable rules, and do you wish to take action?
The Emulation Department is at your disposal for any advice or assistance, including the defence of your rights.
Contact us now.
