OFT gets tough with retailers over 'misleading' price offers

Dodgy retail deals are annoying, and definitely make price comparison harder. But is now the time for a crack-down?

by James Taylor
Last Updated: 19 Aug 2013
Retailers are back in the sights of the Office of Fair Trading; the regulator is launching a crackdown on pricing gimmicks and discounts, arguing that even if they don't break the law, they're harmful to customers because they make us spend money we wouldn't otherwise have spent. This may be true, but are we really being misled? And since many retailers are relying on these promotions to keep the wolf from the door at the moment, the timing isn't exactly ideal...

This is a big issue, since apparently more than a third of all consumer goods are currently being sold via some kind of promotion or discount. According to the OFT's latest study, there are no fewer than seven ways in which retailers are trying to hoodwink customers into spending more money (and not just those of us with zero common sense). The one it's most worried about is the massively irritating practice of 'drip pricing', where you end up paying all kind of extra compulsory costs over and above the list price (like booking fees, credit card surcharges and so on). It also highlighted 'baiting', where a small amount of stock is sold at a discount (the theory being that disappointed customers often still end up spending money in the store). And then there are slightly more questionable ones, like 'Buy One Get One Free', mutliple pack promotions, and time-limited offers ('must end today' etc).

OFT boss John Fingleton argues that all of this is bad for customers, since it costs them 'billions' every year, and it's also bad for the economy, since it makes comparison and switching much more difficult. Hence his promise to slap big fines on anyone who consistently transgresses. And we suspect most people would agree with the basic principle that retailers should be honest and upfront; the price you see should be the price you pay.

The difficult part will be where to draw the line. The whole point of retail marketing is to convince you to buy stuff you didn't realise you needed. And there's a broad range here: drip pricing is one thing, but if we take up BOGOF deals, are we being misled or are we snaffling a bargain? Retailers argue that these discounts are actually good for customers. What's more, it looks inevitable that the retail sector is going to have a hard time in the coming months. So it's no surprise they're distinctly unimpressed by a crackdown that could make it harder for them to attract custom...

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