Regular Price Claims in Holiday Sales

The claim inside a crossed-out price

A sale price on its own is just a price.

Put a higher one beside it, crossed out or labelled was, regular or compare at, and the page makes a second claim: that the product normally sells for the higher number.

Shoppers read the gap as the saving, and the saving is often why they buy this week rather than later.

That is why Canada's competition law treats the higher number as a claim the business must be able to support. Holiday sales are when these claims multiply, often added by store software without anyone deciding to make them.

Read this as a plain outline of the rules, not as legal advice.

How a regular price holds up

Canada's rules on ordinary price claims, stated generally, look for one of two things.

Either a substantial volume of the product actually sold at or above the reference price within a reasonable period before or after the claim.

Or the product was offered at that price, in good faith, for a substantial period of time recently.

A price that sat on a tag for a week before the sale meets neither. Nor does a suggested price the store never charged.

Provincial consumer protection law can apply as well, and it points the same way.

Where false regular prices come from

• Suggested retail prices the store never actually charged.
• Prices raised shortly before a sale to make the discount look bigger.
• Imported product data that filled the regular price field automatically.
• Sales that never end, so the regular price is rarely charged.
• Bundles valued at the total of prices nobody pays separately.

The third is the one many online stores have without knowing it. Product data imported from a supplier's spreadsheet often includes a suggested price, and the store software shows it struck through beside every sale price.

Suggested prices are claims too

A manufacturer's suggested retail price used as the was price is still a statement about what the product ordinarily sells for.

If the product generally sells for less across the market, the comparison overstates the saving, whatever the manufacturer printed on the box.

Show it only where the product genuinely sells at that price in your market, and label it for what it is.

The sale that never ends

A store that runs a sale most weeks of the year has a regular price that is rarely charged, and the comparison weakens with every extension.

The same goes for a holiday sale that starts in early November and runs into January. If the was price applied for a few weeks of the year, it is hard to call it regular.

Decide the dates before the sale starts, put them on the page, and end it when you said you would.

What to be able to show

For every product with a was price, the business should be able to show its price history: what it was offered at, and when.

For the volume test, add the sales records: how many units sold at or above the reference price, and over what period.

Most point-of-sale and ecommerce systems keep this, but nobody looks until asked. Export it before the sale starts and keep it with the sale plan.

If the records do not support the claim, change the claim, not the records.

A worked example

A piano store selling acoustic and digital pianos planned a holiday sale on its digital models, the ones families buy as gifts.

Its online catalogue showed each model with a crossed-out price and a sale price. The crossed-out prices were the manufacturer's suggested prices, which arrived with the product data when the catalogue was set up.

The store had never charged them. Its everyday prices had always been several hundred dollars lower, so every sale was showing a saving much larger than the real one.

Nobody had decided to make that claim. The software made it from a field nobody had looked at since the import.

Before the sale, the regular price field was reset to the store's actual everyday price for each model, checked against a year of sales records.

Models without enough sales history were advertised at a holiday price with no comparison at all.

Safer ways to advertise a sale

A sale does not need a crossed-out price to work.

A holiday price with clear dates, a gift with purchase, or free delivery over a stated amount are claims that are easy to support.

Percentages off are comparisons too, so they need the same backing as a was price.

And where a genuine everyday price exists, labelling it as your regular price for a stated period is clearer than a bare was.

Checking the store before the sale

Filter the catalogue for every product with both a regular and a sale price, and check each regular price against the records.

Look hardest at products imported in bulk, since that is where suggested prices sit unnoticed.

Check emails, banners and printed flyers as well as product pages. A claim in an email is still a claim.

Then give the sale prices an end date in the store software, if it allows one, so the sale ends on time even if nobody remembers.

The counter-case

A store that sells most of its stock at the regular price and marks it down a few times a year has little to worry about, provided it keeps the records.

A product with no history, such as a new line or a one-off purchase, simply cannot carry a comparison yet. That limits the claim, not the sale.

A large or unusual campaign is worth a lawyer's review. For most small stores the rule is simple: show a was price only when the records support it.

Before the sale starts

1. List every product showing a crossed-out price.
2. Find where each price came from.
3. Export the sales history before anything changes.
4. Replace suggested prices with real everyday prices.
5. Drop comparisons you cannot support.
6. Set the sale dates and publish them.
7. Check emails and flyers as well as pages.

Step two is where most of the trouble turns up, because the price nobody chose usually came in with a supplier's data and has been making the same claim on every sale since.

Showing the full price early is the other half of honest pricing, covered in prices that grow at checkout.

Frequently asked questions

West Coast Media Solutions Inc. provides web design, web development, hosting, digital marketing, and business consulting to organisations across Canada, drawing on more than twenty-five years in the field.