What do you know about the regulations for pricing your products? From my visits to shops and looking at adverts and websites, this seems to be an area that retailers are not so familiar with, so in this month’s article we’re going to consider the basic rules of pricing and in next month’s column I’ll look at some of the trading practices that I’ve noticed being used by flooring retailers to try and make themselves appear better value and win more business, but which could result in a prosecution for unfair commercial practices.
On 6th April 2025 there was a major update to the rules governing pricing in the UK. Guidance on the protection from unfair trading provisions in the Digital Markets, Competition and Consumers Act 2024 came into effect and replaced the previous Consumer protection from unfair trading regulations 2008. At around the same time, the Government published updated guidance on the Price Marking Order 2004. All of these documents can easily be found online, but understanding and following the rules is a very contentious area. In the era of easy price comparison, retailers are keen to find ways to look more competitive than their rivals. With this update, even retailers who are familiar with the law would be well advised to refresh themselves on the legal requirements.
Do I have to price mark my products?
Yes. It is a legal requirement that a consumer should be able to understand the basic price per unit of every product you display. It doesn’t have to actually be on the product, but must be where the consumer can easily see it so they do not have to ask in order to begin making a purchasing decision or to compare prices with other products.
All consumer prices must be VAT-inclusive. You don’t have to display prices in adverts.
What rules govern the price I can charge for any product?
The simplest answer to this is that there aren’t any, although this comes with some qualifications. You can sell a product for whatever you think is the right price for you, and as retailers face different overheads and different economies of scale, there will usually be differences in the mark-ups of their products to ensure they trade at a profit, and in some cases, to attempt to make bigger profits. Once a consumer has agreed a price, they cannot later claim it was an unfair price, but the quality and performance of what you sell will be assessed with price as one of the factors if there is a later dispute. So a carpet at £40 per square metre should perform as well as those sold by others in that price range, and one sold at £150 per metre should have something about it that reflects the higher value.
But there are strict rules about offering discounted prices, see below.
Do I have to sell a product at the price displayed on it? Even if I have made a mistake?
No. When you display a price you are, in effect, saying to your customer that if they offer you that price you are likely to accept it, but until a customer has made an offer and it has been accepted by you, there is no contract and you can amend any price, or offer a discount. Of course, if you’ve given a quotation and not spotted the error, that is likely to be binding, especially if a deposit has been paid. A consumer cannot force you to sell at an obviously incorrect price, but if the deal has been done you can’t retract it.
What rules apply to sales and other special offers?
The simplest form of sale offer is to display a notice saying ‘X% off all marked prices’ and then to deduct this price from the product at the time of purchase. However, the individual prices must have applied to every product for a minimum of 28 days in the previous six months. If there have been other prices for that product since it was at the highest price, the intervening prices must be shown and each of them must not have been the price for a continuous 28 day period because this would create a new ‘was’ price which would have to be the reference price when calculating the discount.
Price matching
If you offer a price match to your customers, whether in store or online, the terms of this need to be clear so that a consumer knows when they could claim.
By Richard Renouf, Independent Flooring Consultant
Richard Renouf is an experienced customer service and flooring consultant and expert witness. He can be contacted via The Stocklists’ editor – lauren.mccarthy@kick-startpublishing.co.uk – and your questions may even find their way into future articles to help others dealing with similar situations. Please note that this article is not intended to be, or to be a substitute for, legal advice.