The government is making changes to the Price Marking Order to better reflect what customers pay at the tills.
The Price Marking Order 2004 (PMO) took effect in Great Britain in 2004. Its aim was to provide greater transparency to consumers about the prices of goods.
Unless an exemption applies, the PMO requires the selling price of a product to be displayed and sets out the circumstances in which a product must clearly display a unit price too.
The PMO has recently come under review to ensure that, in light of the trend in pricing and promotional offers, traders are mandated to provide consumers with sufficient information to make comparisons between products, says legal firm Lewis Silkin.
In the updated guidance, the PMO requires traders to display the ‘selling price’, which is the price that a consumer will pay for the actual weight or volume purchased. The selling price should include any taxes.
The PMO also requires traders, where applicable, to display the ‘unit price’ – which is the price that would be charged for the relevant unit of the goods, depending upon how the goods are sold.
Paying what it says on the label
One of the key issues relates to the display and presentation of prices.
“Prices must be unambiguous, easily identifiable, clearly legible, and close to the product (or its description online), ” Lewis Silkin said.
“Both selling and unit prices must be displayed for promotional offers and loyalty discounts, unless an exemption applies. If a product is offered at more than one price (for example loyalty schemes), all applicable prices and the conditions for each must be clearly shown. Care should be given to not give one set of prices prominence over the other.”
Another key focus of the guidance is reductions.
“For large-scale, short-term discounts (for example, “20% off all paint” which runs over a bank holiday weekend), a general notice may be used instead of changing every price label, but only if it is not reasonably practicable to update each one,” Lewis Silkin said.
“However, the guidance gives a different example where a pet shop sells multiple brands of cat litter. They run a planned offer for the month of December, of 25% off one brand of cat litter. As the offer applies to specific products with a set reduction, it would be reasonably practicable to update the pricing on the affected products.”
Breaches can result in criminal prosecution (unlimited fines) or civil enforcement through the courts (fines up to 10% of global turnover). Trading standards deal with criminal enforcement.
The Competition and Markets Authority can also enforce breaches of the PMO directly using its new enforcement and substantial fining powers.
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