From 26 October 2019, products or services must be advertised or displayed with a single price.
Here’s what you need to know.
Single pricing requirements
To comply with new laws you’ll need to include all charges (including taxes, duties and extra fees) in the headline price of goods and services, including the cost for pre-selected options. This is particularly relevant if you are selling online.
Previously, businesses could advertise one price but once a customer started the buying process, extra charges or options may have been added (for example: when purchasing an airline ticket, options are frequently added during the buying process). This may have led to consumers to paying for more than they expected if they were not give a chance to opt-out of the extras.
As part of these changes, businesses need to advertise the full price of their item and consumers can then choose to deselect optional extras from their purchase (and therefore reducing the total cost).
Component pricing vs single pricing
Component pricing is when the cost of goods and services advertised excludes any additional charges the customer will have to pay, such as goods and services tax (GST), other applicable fees and/or optional extras.
If you use component pricing when advertising your products or services, you must also display the total price of the goods and services (including any pre-selected options) as a single figure which is clear to the customer at the time of sale.
Here is an example from the ACCC website which demonstrates the use of a single price alongside the component price:
A ticket seller prices a ticket at $40. The seller also imposes a mandatory booking fee of $3 per ticket. The purchase also attracts 10 per cent GST.
This could be advertised as one of these options:
- $47.30 (including $3 booking fee and 10% GST)
- $43 + $4.30 GST = $47.30
- $40 + $3 booking fee + $4.30 GST = $47.30.
Pre-selected optional components
As part of these changes, if your products and services have optional extras which are pre-selected and included in the advertised price, consumers should then have the option to deselect them as they go through the buying process.
A common example of this is the additional costs which are incurred when purchasing a vehicle. As part of these changes, the price of the car must include all on-road costs as well as any optional extras. These charges must be shown in the total sale price of the car unless the customer chooses to de-select the optional extras.
Exemption for cafes and restaurants
If you run a cafe or restaurant which has a surcharge on specified days, such as public holidays, your menus and price lists are exempt from these new rules, providing you clearly state 'a surcharge of [percentage] applies on [the specified day or days]'. These words must be displayed at least as prominently as the most prominent price on the menu.
Visit the Australian Competition & Consumer Commission (ACCC) website for more information on the new single pricing requirements.