The Manufacturer’s Suggested Retail Price, a type of comparison price, (and all other aspects of a listing) must be truthful and not misleading. Merchants are responsible for complying with these important legal obligations. Use of a comparison price in a listing is not required, but can be done at the merchant’s option.
In general, a comparison price should be: (i) for an identical item; (ii) accurately described so that consumers clearly understand what is being compared; and (iii) a price that was recently used AND that was used for a reasonable length of time.
- MSRP or RRP or List Price – an MSRP may be deceptive or misleading and potentially unlawful if it is not a price at which the item was actually listed and sold for a reasonable length of time.
- Substantiation – Each merchant is responsible for having a reasonable basis for making claims about a product, including about its price. This generally means that you should have evidence of any comparison price posted. If a complaint about the truth or accuracy of a comparison price arises, the merchant that posted it may be required to present evidence supporting the comparison.
1) Merchant A lists an item that has an MSRP. However, merchant A has never listed or sold the item at the MSRP and has no evidence that anyone else has. Merchant A should not use the MSRP as a comparison price, because there is no reasonable basis for making this claim (e.g. no evidence that the MSRP was ever the list or sale price).
2) Merchant B listed and sold an item for price x for the last 3 months. Merchant B finds new supplier for same item and lowers his costs. Merchant B chooses to pass the savings on to customers and lists the item at a new, lower price of y. Merchant B may compare the new price (y) with the old price (x) because the old price was recently used and for a reasonable length of time. Merchant should retain evidence of sales at price x.
3) Merchant B from the example above would like to continue comparing the new price (y) with old the price (x) 8 months after Merchant B changed the price. Merchant B should not use price x as a comparison because it is now 8 months old.
The laws and rules for comparison prices may differ from one country to another, but the UK’s Ad Standards Authority has a helpful guide.