Retail Pricing Laws and Regulationsadmin
If a manufacturer introduces a policy on its own initiative regarding a desired price level, the law only allows the manufacturer to negotiate with retailers who accept that policy. A manufacturer may also stop negotiating with a retailer who does not comply with its resale pricing policy. That is, a manufacturer can implement a merchant policy on a “take it or leave it” basis. d) However, this does not mean that all list prices are fictitious and therefore all discount offers in the list are misleading. Typically, a list price is a price at which items are sold, if not everywhere, at least in large retail stores that do not operate their business on a discount basis. It is not considered fictitious if it is the price at which it is essential (i.e. non-isolated or insignificant) sales are made in the advertiser`s commercial territory (the territory in which it operates). Conversely, if the list price is significantly higher than the maximum price at which significant sales are made in the commercial territory, there is a clear and serious risk that the consumer will be misled by an advertised reduction in that price. Chapter III, Uniform Laws, describes the many uniform laws that States adopt, including Section 7, Unit Price Requirements; Article 15, False declaration of prices; Article 22, Civil penalties; and article 23, Criminal sanctions. (g) On the other hand, a manufacturer or other distributor operating on a large regional or national scale cannot be required to monitor or investigate in detail the prices charged for its articles in such a large commercial area. If he advertises or disseminates in good faith (i.e. as an honest estimate of the actual selling price) a list or price with a ticket in advance that does not significantly exceed the highest price at which significant sales are made in his business park, he will not be accused of fraudulent practice.
For example: (a) Many buyers believe that a manufacturer`s list price, or suggested retail price, is the price at which an item typically sells. So, if a reduction in this price is announced, many people will believe that they are being offered a real deal. To the extent that list prices or recommended retail prices do not, in reality, correspond to the prices at which a significant number of sales of the product concerned are made, advertising a discount may mislead the consumer. Retail stores or manufacturers may develop their own retail price regulations as long as they comply with all applicable laws. For example, manufacturers are free to set MSRPs or suggested retail prices that retailers can observe or ignore. Some manufacturers require retailers to keep prices above a certain level, while others set caps. Retailers can set their own rules that control the discounts their customers can get and the prices their sales reps can accept. NOTE: The states listed above have exceptions to item pricing.
Be sure to consult the law or contact the state director for more information. (b) There are many methods used to promote manufacturers` recommended retail or list prices: large-scale (often national) advertising in the media by the manufacturer itself; Pre-contravention by the manufacturer; Direct marketing; Distribution of advertising material or price lists intended for the public. The mechanisms used are not crucial. This part deals with all the means used to place these prices in front of the consuming public. A price posting is not required for items that are only offered for sale with the help of a seller. In these cases, items with no displayed price may be displayed at a busy service center. Examples of when this exception may apply are products offered for sale behind the cash register (e.g. Tobacco products, spirits, etc.), products sold in a bakery, delicatessen or meat counter in a grocery store, or the counters of department stores selling cosmetics, perfumes and/or jewellery. If a retailer chooses to publish prices for items sold at wet service counters, prices must be accounted for in accordance with weights and measures pricing rules, and these prices may also be subject to price revisions. (c) There would be little problem of deception in this area if all products, without exception, were sold at the retail price set by the manufacturer. However, widespread non-compliance with recommended or list prices by manufacturers and the emergence of large-scale retail discounts have seriously compromised the reliability of list prices as indicators of the exact prices at which items are actually retailed.
The changing conditions of competition have created a more acute problem of deception than in the past. Today, it is only in rare cases that all sales of an item are at the retail price or list price recommended by the manufacturer. (e) This general principle applies regardless of whether the advertiser is a national or regional manufacturer (or other non-retailer), a mail-order or catalogue distributor dealing directly with the consumer or a local retailer. However, some differences in the responsibilities of these different types of businessmen should be noted.