Price Indication Ordinance: How to Strengthen Trust in Your Company with Price Transparency [5 Reading Tips]

Price Indication Ordinance Reading Tips
Source: Unsplash/Artem Beliaikin

For more than 90 per cent of consumers, the transparency of a company contributes to their purchasing decision. This is because transparency creates trust and trust is the basis for successful customer relationships.

Especially when it comes to pricing, customers are very sensitive and demand clear communication. From 28th May onwards, this will be ensured by the new Price Indication Ordinance (PAngV), which regulates information on price reductions and the labelling of base prices. These new rules affect both stationary retail and e-commerce. Prick up your ears!

Price Indication Ordinance: Better Shopping Experiences and More Comparability

It must be easily identifiable, clearly legible and unambiguous how much a product costs. Distinct labelling prevents customers from having to look for the price for a long time or even having to ask for it.

This improves the shopping experience and relieves the burden on customer service. Additional information such as the price per unit is to help consumers to better compare offers. This issue is also becoming increasingly relevant due to the currently rising prices for food, fuel and the like.

Distinct labelling applies to online shops as well. Price information that only becomes visible by clicking on a separate link or hovering over an element does not count.

Price Indication Ordinance: Duty to Provide Information When Advertising Discounts

It is not uncommon to offer discounts of 10, 15 or even 50 per cent to attract customers to online shops or sell remaining stock. Up to now, there has often been no information about how much the product previously cost. From 28th May onwards, providing this information will be a must for all B2C companies. The initial price refers to the lowest total price that merchants have charged for the product in the last 30 days.

This requires companies to clearly document all price changes and make them available to everyone. Price management is the main task of an ERP tool, but all product-specific data is also managed centrally in a PIM system, which communicates with the ERP solution.

So far, so good. However, surprise, surprise, there are exceptions to this rule as well. Perishable goods, for example, which are subject to regular price fluctuations, are excluded. In other words: the duty to provide information particularly applies to technical products such as smartphones, smart fridges and robot vacuum cleaners.

Popular promotional offers such as »Buy one, get one free« and »Three for the price of two« as well as recommended retail prices are also not covered by this rule, as they do not take a higher initial price as a starting point.

Price Indication Ordinance: The Price Alone Is Not Enough

For all goods whose price depends on weight, length, volume or size, a base price must be indicated in addition to the final price. The base price is the price per unit including VAT. With the new ordinance, this price will be uniformly set at one kilogram, one litre or one square metre.

In addition, the deposit for reusable products may not be included in the final price, but must be indicated separately. The online shop of our client Netto shows what this can look like in e-commerce.

Furthermore, it is important for online shops to formulate shipping and delivery costs clearly and comprehensibly. Companies that do not yet meet all these requirements should take action as soon as possible and adapt their online shop accordingly.

Our 5 Reading Tips of the Week

New Price Indication Ordinance as from 28 May 2022 [Taylor Wessing]

Price Indication Directive: These Are the Facts Online Merchants Need to Know [Shopware]

Amendment of the Price Indication Ordinance – What to Do? [GoldbergUllrich Rechtsanwälte]

Why Brand Transparency Is Essential to Driving Customer Loyalty in 2021 [Emarsys]

Price Indication Directive [European Commission]

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