Can you explain these Pricing Laws A complex topic of law but one that is relevant for marketers in stating the value for products and services. Price is how consumers gauge the quality and value of a product or service. There are many deals to be found, but are consumers getting great value or are they being tricked and confused? We will look at topics that relate to the followiing: What is free, bonus, and no charge? As a consumer, we love deals!! However, is what is stated, really free? Really a bonus? Really no charge? Or, is that free stuff really hidden in an inflated price to the consumer. The good news is that there are laws to protect consumers and ensure a fair and competitive playing field for companies. Credit and Leasing The thought of credit is enticing for consumers, but there are many laws that marketers struggle with providing credit and leasing options across Canada. Federally and provincially, the laws differ and advertising in Ontario may differ in British Columbia. Therefore, marketers need to be aware of the language used in advertising and consumer materials. As a consumer, have you read your credit card contract? For many not because of the length, but the reasoning in many cases is the demand that the federal and provincial governments put on companies to ensure fairness in their credit and leasing policies.

 

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Clause #3 - Price Claims What is a price claim? Why is Ad Standards concerned with it? Simple. As consumers, we rely on the price seen to be truthful and honest. However, marketers like to use price as a means to change consumer behaviours. In doing so, some may cross the line. Clause #3 provides guidance to marketers and protection to consumers. So, what is a price claim? See below: (A) No advertisement shall include deceptive price claims or discounts, unrealistic price comparisons or exaggerated claims as to worth or value. The use of terms like Regular Price . Suggested Retail Price . Manufacturer's List Price Fair Market Value are deceptive terms when used by an advertiser to indicate a savings. However, they are acceptable if: 1. The advertiser actually sold a substantial volume of the advertised product or service within a reasonable period of time (such as six months) immediately before or after making the representation in the advertisement 2. Offered the product or service for sale in good faith for a substantial period of time (such as six months) immediately before or after making the representation in the advertisement. (B) Where price discounts are offered, qualifying statements such as "up to," "XX off," etc., must be: in easily readable type, in close proximity to the prices quoted and, where practical, legitimate regular prices must be included. (C) Prices quoted in advertisements in Canadian media, other than in Canadian funds, must be so identified. Example: Competition Bureau - Price Claims Proceeding Against Hudson Bay Company (HBC) 1670 DEPUNG HUDSON'S BAY CO. On February 22, 2017, the Competition Bureau announced that it had completed an investigation of the Hudson's Bay Company (HBC). During the inquiry, they looked at their sale of mattress sleep sets. As a result, the Competition Bureau initiated a proceeding with the Competition Tribunal under the Competition Act's deceptive marketing practices and ordinary price claims provisions. In its application, the Competition Bureau alleges that HBC had engaged in deceptive marketing practices by informing consumers that they were purchasing "clearance" sleep sets when the sleep sets were actually being ordered new from a factory supplier. The application also alleges that the "regular prices of the sleep sets were so inflated above what the market would bear that sales at the regular price were virtually non-existent," citing several advertisements for sleep sets printed in weekly flyers that the Bureau claims fail both the volume and time tests. As a result, the Competition Bureau is seeking an order requiring HBC to pay an administrative monetary penalty, which could amount to as much as $10 million, and requiring HBC to send out public corrective notices. While the proceeding against HBC is ongoing before the Competition Tribunal, previous ordinary price claim cases have commonly settled via consent agreement with the Competition Bureau, resulting in penalties of up to $1.2 million. However, retailers should take note that as a result of the 2009 amendments to the Competition Act, there is now a $10 million ceiling for first-time offences by corporations. Clause #3 - Price Claims What is a price claim? Why is Ad Standards concerned with it? Simple. As consumers, we rely on the price seen to be truthful and honest. However, marketers like to use price as a means to change consumer behaviours. In doing so, some may cross the line. Clause #3 provides guidance to marketers and protection to consumers. So, what is a price claim? See below: (A) No advertisement shall include deceptive price claims or discounts, unrealistic price comparisons or exaggerated claims as to worth or value. The use of terms like Regular Price . Suggested Retail Price . Manufacturer's List Price Fair Market Value are deceptive terms when used by an advertiser to indicate a savings. However, they are acceptable if: 1. The advertiser actually sold a substantial volume of the advertised product or service within a reasonable period of time (such as six months) immediately before or after making the representation in the advertisement 2. Offered the product or service for sale in good faith for a substantial period of time (such as six months) immediately before or after making the representation in the advertisement. (B) Where price discounts are offered, qualifying statements such as "up to," "XX off," etc., must be: in easily readable type, in close proximity to the prices quoted and, where practical, legitimate regular prices must be included. (C) Prices quoted in advertisements in Canadian media, other than in Canadian funds, must be so identified. Example: Competition Bureau - Price Claims Proceeding Against Hudson Bay Company (HBC) 1670 DEPUNG HUDSON'S BAY CO. On February 22, 2017, the Competition Bureau announced that it had completed an investigation of the Hudson's Bay Company (HBC). During the inquiry, they looked at their sale of mattress sleep sets. As a result, the Competition Bureau initiated a proceeding with the Competition Tribunal under the Competition Act's deceptive marketing practices and ordinary price claims provisions. In its application, the Competition Bureau alleges that HBC had engaged in deceptive marketing practices by informing consumers that they were purchasing "clearance" sleep sets when the sleep sets were actually being ordered new from a factory supplier. The application also alleges that the "regular prices of the sleep sets were so inflated above what the market would bear that sales at the regular price were virtually non-existent," citing several advertisements for sleep sets printed in weekly flyers that the Bureau claims fail both the volume and time tests. As a result, the Competition Bureau is seeking an order requiring HBC to pay an administrative monetary penalty, which could amount to as much as $10 million, and requiring HBC to send out public corrective notices. While the proceeding against HBC is ongoing before the Competition Tribunal, previous ordinary price claim cases have commonly settled via consent agreement with the Competition Bureau, resulting in penalties of up to $1.2 million. However, retailers should take note that as a result of the 2009 amendments to the Competition Act, there is now a $10 million ceiling for first-time offences by corporations.