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Price indication law

Be clear, upfront and honest about your prices

Under the Consumer Protection Act 1987, it is against the law to provide a misleading price indication to consumers about goods, services, accommodation or facilities. Price indications include price comparisons, single prices, as well as other information relating to the price of something, such as any conditions which may apply. The Act enables the Secretary of State responsible for consumer affairs to endorse codes of practice giving practical guidance to traders and a Code of Practice for Traders on Price Indications is in place.

Quote�You can give price indications that do not follow the code, provided they are not misleading.�End Quote

These regulations provide good practice principles for traders on price indications, but the law does not require a business to follow the Code. A business can still give price indications that do not follow the code, provided they are not misleading. Price indications are misleading if what is conveyed, or what customers might be reasonably expected to infer from the price or any omission from it, includes any of the following:

That the actual price is more than the indicated price

That the actual price depends on certain facts and circumstances that were not outlined in the indicated price, for example, that the price only applies to pensioners

That there is an additional charge to the indicated price, for example, the indicated price does not mention postage and packaging that must be paid

That the customer can expect the price of goods to increase or decrease when in fact this is not the case, for example, indicating that a price is a 'special introductory offer' when in fact the price will be constant

That the information provided in a price comparison is false

It is also unlawful to provide misleading indications about the method of determining a price, in similar ways as outlined above.

Legible and inclusive

The Price Marking Order 2004 covers the sale of products between retailers and consumers. It requires the selling price and the unit price of products to be clearly displayed. Unit prices are required for goods sold loose from bulk like fruit and vegetables and for pre-packaged goods which are required by weights and measures law to be sold with an indication of quantity. Prices must be in sterling and inclusive of VAT and other taxes. Packing and delivery charges can be indicated separately so long as they are clearly identifiable to the customer.

Prices generally should also be clearly legible, so that customers should not have to ask for help to see a price. Items do not have to be marked individually but must be shown either on the goods themselves or on notices, catalogues or lists near to them.

Quote�Prices should be clearly legible, so customers do not have to ask for help to see them.�End Quote

Some goods fall outside these rules: sales of antiques, sales by auction, and products sold as part of a service (like shampoo used at a hairdresser).

Small shops with an internal sales/display area of not more than 280 square metres are exempt from the requirement to unit price pre-packaged products in constant quantities.

Rules requiring clear price indications also apply to restaurants, bars, cafeterias and take-aways serving food and drink as part of a service, although under a different set of regulations – Price Marking Order 2003.

For more information, see the Code of Practice for Traders on Price Indications from the DTI

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