Can businesses advertise fake discounts in Australia?
No, businesses cannot legally advertise fake discounts in Australia. Under the Australian Consumer Law (ACL), it is illegal to mislead consumers about prices. A product must have been sold at the "was" price for a reasonable period before a business can legally advertise a "now" discount.
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How it works in practice
The Australian Consumer Law
The Australian Consumer Law (ACL) strictly prohibits businesses from engaging in misleading or deceptive conduct regarding the price of goods and services. This means that advertising a fake discount, such as inflating a price just before a sale to make the discount look bigger, is a direct breach of the law.
Discount and Pricing Rules
When a business uses comparative pricing, such as strike-through or "was/now" prices, the previous price must be entirely genuine. The item must have been offered and sold at that higher price for a reasonable period immediately before the sale began. If the product was never actually sold at the higher price, or only offered at that price for a few days, the discount is considered fake and illegal.
Penalties for Misleading Pricing
The Australian Competition and Consumer Commission (ACCC) actively monitors pricing practices and takes enforcement action against businesses that trick consumers. Companies found guilty of advertising fake discounts face severe financial penalties, which can run into the millions of dollars. The law ensures that consumers can trust the savings advertised during major sales events.
Important exceptions
While fake discounts are completely illegal, there are a few legal nuances to pricing rules in Australia.
A business is not legally required to offer a product at the "was" price for a universally defined number of days. What constitutes a "reasonable period" depends heavily on the specific type of product and the fast-moving nature of the market.
Additionally, businesses can legally compare their current price to a Manufacturer’s Recommended Retail Price (RRP). However, they can only do this if the product was generally sold at the RRP in the broader market, rather than using it to imply a false saving.
What you should do now
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Take screenshots or photos of the advertised discount, ensuring you capture both the original and discounted prices along with the date.
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Research the price history of the specific product using online price-tracking tools to verify if it was recently sold at the claimed higher price.
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Contact the business directly in writing, providing your evidence and asking them to clarify their pricing history or honor a genuine discount.
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Request a formal refund or a price difference if you have already purchased the item and subsequently discovered the discount was fake or misleading.
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Report the business to the Australian Competition and Consumer Commission (ACCC) or your state's fair trading agency if the issue remains unresolved.
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