Pricing

 

Clarity in pricing

Clarity in pricing requirements deal with how business may use “component pricing” (specifying the price for each part of a good or service separately) when advertising their products.

The requirements are contained in section 48 of the ACL and require that where a person, in trade or commerce, makes a price representation that is less than the total price required to be paid for the good or service involved (a component price) then the person must also specify in a prominent way and as a single figure, the single price for the goods or services. To be sufficiently prominent it must be “at least as prominent as the most prominent” of the partial price representations. This prevents, for example, car companies specifying a price “plus on-road costs”. Therefore, although component prices are not prohibited, the full price must be prominently displayed. An amendment to these rules allows the Commonwealth minister to exempt certain industries from the requirement to display a single price; it has been determined that restaurants and cafes will be excluded from the requirements.

The provision also requires a person to specify the minimum amount required to be paid for sending goods to the customer, where this price is known at the time of the price representation. However, this may be listed as a separate figure and it does not have to be included in the single specified price.

Unit pricing

Unit pricing allows consumers to quickly compare the value of similar products of varying size and brands. From 1 July 2009, new regulations make it compulsory for some grocery retailers to display a unit price on store labels and in advertising where a selling price is displayed. The new unit pricing requirements are set out in the Trade Practices (Industry Codes – Unit Pricing) Regulations 2009. The code affects retailers that sell food-based groceries to consumers.

Excessive surcharging

In February 2016, new legislation was enacted to ban excessively surcharging credit, debit and prepaid card payments. It is common for some businesses, particularly in the airline and ticketing industries, to impose a surcharge on card payments.

Businesses incur costs for processing card payments. While some businesses include these costs in the prices they charge for goods or services, others pass on the costs as a payment surcharge.

The purpose of the ban is to stop businesses from charging surcharges that are more than what it costs to process the payment.

The Reserve Bank of Australia (RBA) publishes a standard that relates to the surcharges businesses charge customers when paying by credit or debit cards. The new law states that a surcharge is excessive if it is more than the amount permitted in the RBA standard (s 55B C&CA).

The ACCC has been empowered to enforce the ban from 1 September 2016, when it will apply to “large merchants” (defined as having a consolidated gross revenue of $25 million or more, or the value of its consolidated gross assets is $12.5 million or more, or it employs 50 or more employees). The ban will apply to other merchants from 1 September 2017.