Indication of prices for goods and services adopted in Latvia

In October this year, the guidelines of the Consumer Rights Protection Centre on the indication of prices for goods and services were adopted in a new wording, replacing “Guidelines on the Pricing of Goods and Services, Including Fair Commercial Practices” of 2015. The purpose of the new wording of the guidelines is to clarify the basic requirements for price indication, as well as to ensure compliance with consumer rights and the prohibition of unfair commercial practices. The most important explanations and clarifications of these guidelines are related to the indication of the original price and the discount price, as well as to the rules for the use of comparative advertising.

 

Indication of the original price of the goods and the discount price

The original price of the goods means the lowest price offered to the consumer in the 30 days before the price reduction took place. This 30-day lowest price also applies to prices that were set as part of a sale, promotion, or any other kind of price reduction. That means that if, for example, a price reduction was applied to goods in the middle of the month, but then the price of the goods increased again to its normal level, the 30-day lowest price will be considered the original price and any discounts will have to be calculated from this price (until the 30 days have passed).

In relation to the indication of these prices, there are also specific requirements that traders must comply with. Namely, price indications must be such that they are easy to see, legible, and sufficiently clearly indicated, so as to allow the consumer to easily understand the original price and the discount price, as well as the goods to which these prices apply.

Furthermore, the price tags must reflect whether the price refers to a specific quantity of the product (the price of a certain unit of measure) or to one unit of the product (piece price). It is important to note that when announcing a reduction in the prices of goods with the phrases “discounts until…” or “price from…”, the trader must ensure that the price or discount included in this announcement applies to at least 10% of the goods in question. So, if, for example,  the trader announces a discount of “up to 70% to all Christmas ornaments”, then the 70% discount must apply to at least 10% of the entire number of Christmas ornaments on sale.

Exceptions to the requirement to indicate the original price and the discounted price

The above-mentioned rules on indicating the original price and discount price of goods do not apply to certain offers of goods, for which it is permitted to indicate not the 30-day lowest price, but the currentprice. This exemption applies to:

• volume or bulk purchase price offers, as well as sets of various goods
• offers related to making a purchase, for which it is not possible to identify specific goods in advance before making a purchase
• for permanent and long-term offers for a reduction in the price of goods, which are addressed only to a specific market audience
• loyalty offers
• offers of price reductions for perishable or soon-to-expire goods

It is important to emphasise that perishable or soon-to-expire goods mean those whose expiry date is within the next 30 days. In its turn, seasonal goods, goods that are obsolete, and goods that are planned to be withdrawn from the market due to changes in the product mix or other circumstances in the organisation of trade do not fall within the category of perishable goods or goods that are about to expire.

Moreover, the original price does not need to be indicated for offers for a price reduction for services, but for services, the discount price and the price before the discount is applied must be clearly indicated.

Finally, it should be noted that these exceptions apply specifically to situations where it is permitted to indicate a different price from the original price, but this does not mean that there are any exceptions to the requirements for the indication of prices themselves (to be easily visible, clear, comprehensible, etc.).

Loyalty offers

The exceptions related to loyalty offers need to be addressed in more detail. The guidelines specify cases in which it is also permitted not to indicate the original price of goods for personalised offers or offers related to the customer loyalty system. Such cases are, for example, personalised offers for a price reduction in the case of special events in the life of loyalty programme members (for example, on a customer’s birthday or name day), loyalty system offers that are permanent or regular (customer discount cards) and offers that offer a discount for product purchases over a long period of time in certain situations (on a specific day each week or every holiday, a discount or other offer for a price reduction for a specific goods or category of goods, upon presentation of the customer card).

However, if discount campaigns or sales of goods are organised for a limited period of time as part of the loyalty programme, exceptions of this kind are not applicable and the trader needs to indicate the original price of the goods.

Requirements for comparative advertising

The guidelines also explain the requirements for the use of comparative advertising, highlighting the key points that must be followed so that comparative advertising is fair and does not mislead consumers. Firstly, the goods and services included in the comparative advertising must satisfy the same consumer needs and must be intended for the same purpose. Secondly, this comparison must objectively reflect the level of prices of goods and services in the market, and unfair use of market information is prohibited. Thirdly, comparative advertising must clearly and demonstrably provide the most essential information that consumers need in order to be able to fully and objectively compare the goods offered. This means that the advertisement must reflect information about the time period in which the comparison was made and information about the outlets where the comparison was made.

Overall, the new wording of the guidelines on price indication developed by the Consumer Rights Protection Centre contains valuable and up-to-date explanations, as well as examples and illustrations that answer areas of uncertainty, and which traders should take into account in order to avoid violations of consumer rights and the prohibition of unfair commercial practices.