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Unfair Pricing Practices Laws The Canadian Competition Act was created to stop unfair pricing: - Price Fixing - Retail Price Maintenance - Double Ticketing - Bait and Switch - False Sale Prices - Misleading Advertising

Pricing Practices: Price Fixing A group of businesses collaborating to set a price for a specific product.

Pricing Practices : Price Fixing

Pricing Practices : Resale Price Maintenance A company tells another independent company what price to sell an item for. - Suppliers may try to impose a resale price to maintain brand positioning or to give resellers attractive profit margins. (called MSRP) - Any arrangement between a supplier and a reseller that means the reseller will not advertise, display or sell the goods the supplier supplies below a specified price is illegal. - It is also illegal for a supplier to cut off, or threaten to cut off, supply to a reseller (wholesale or retail) because they have been discounting goods or advertising discounts below prices set by the supplier. - A supplier may recommend an appropriate price for particular goods but may not stop retailers charging or advertising below that price. In most cases, a supplier may specify a maximum price for resale. - Suppliers may withhold supplies of goods to a company that engages in ‘loss leader selling’.

Pricing Practices : Resale Price Maintenance There are many theories as to whether this is anti-competitive and should be illegal…

Pricing Practices : Double Ticketing Putting 2 prices on an item and charging the customer the higher price. Stores must charge the lowest ticketed price.

Pricing Practices : Bait and Switch Advertising a low-priced product but then trying to persuade customers to buy a higher priced one.

Pricing Practices : False Sale Prices Marking prices up and then putting them “on sale” so that customers feel they are getting deal.

Pricing Practices : Misleading Ads

Pricing Guidelines and Regulations Competition Act Dos: - Do avoid fine print disclaimers. If you do use them, make sure the overall impression created by the ad and the disclaimer is not misleading. - Do fully and clearly disclose all material information in the advertisement (ie “refurbished”). - Do charge the lowest of two or more prices appearing on a product. - Do ensure that you have reasonable quantities of a product advertised at a bargain price (loss leader). - Do, when conducting a contest, disclose all material details required by the Act before potential participants are committed to it. In Canada the Competition Bureau is an independent law enforcement agency that protects Canadians by promoting competitive markets and enforcing the “Competition Act”.

Competition Act Don'ts - Don't confuse "regular price" or "ordinary price" with "manufacturer's suggested list price". They are often not the same. -Don't use "regular price" in an advertisement unless the product has been offered in good faith for sale at that price for a substantial period of time. - Don't use the words "sale" or "special" in relation to the price of a product unless a significant price reduction has occurred. - Don't run a "sale" for a long period or repeat it every week. - Don't use illustrations that are different from the product being sold. - Don't make a performance claim unless you can prove it, even if you think it is accurate. Testimonials usually do not amount to adequate proof. - Don't sell a product above your advertised price. - Don't make any materially misleading product warranty or guarantee, or promise to replace, maintain or repair an article.

Pricing Guidelines What is SCOP? Do stores live up to their code when the price is wrong? CBC Video To do: On the course Web site, complete the assignments 1 thru 3 on Price regulation.

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