Promotions and price reductions are powerful tools in the retail sector, and are subject to legal regulations. From sales and liquidation sales to special offers, coupons, contests and price comparisons, retailers must strike a balance between effective marketing and legal compliance. In this blog series, we explore key legal principles to help navigate promotional strategies as well as the main pitfalls. It is not an exhaustive overview of the rules but rather a guide to the main points to keep in mind.
This series will cover:
- Price reduction announcements: the legal framework and best practices
- Sales periods: rules, restrictions, and compliance
- Liquidation sales: when and how to legally conduct them
- "Buy One, Get One Free? " The legal do's and don'ts of joint offers
- Promotional contests: how to organise them without legal risks
- Coupons and vouchers: don't forget the required information
- Gift cards: legal considerations and recommendations
Professional legal support is highly recommended when running promotional actions, whether for examining envisaged promotional actions, validating advertising material or drafting the applicable general terms and conditions. Indeed the Economic Inspection keeps a close watch and can impose heavy penalties on retailers failing to comply with the rules.
Part 2 – Sales periods: rules, restrictions, and compliance
This second article in our "Retail promotions & pricing: legal essentials for businesses" series presents an overview of the specific rules governing sales in Belgium.
What is meant by sales?
Sales are not just any kind of price reduction announcement; they are strictly regulated by law. During the sales period, retailers are allowed to sell at a loss, which in principle is prohibited under Belgian law.
As we detailed in part one, Belgian law does not prohibit selling at reduced prices as such but only prohibits a sale under the names "Soldes", "Opruiming", "Solden" or "Schlussverkauf" or similar terms outside the periods set out below.
Belgian case law has held that the words and phrases in the following non-exhaustive list are similar to "Soldes", "Opruiming", "Solden" or "Schlussverkauf": "Sales"; "End of series"; "Great February sale"; "Sale of winter models"; "Summer is approaching, we are closing our winter stock". So, caution should be exercised when announcing promotional periods outside the sales period.
When can sales be advertised?
In Belgium, the offer for sale and operating sales under the name(s) "Soldes", "Opruiming", "Solden" or "Schlussverkauf", or under any other similar word or term, is only permitted during the sales period set by law, which are from:
- 3 January to 31 January inclusive;
- 1 July to 31 July inclusive.
If the first day of the period is a Sunday, then the sales period will begin on the day before.
The retailer may announce the sales and promote the sales under these names before the beginning of the sales periods, provided that such advertising indicates the date from which the promotion takes effect.
What are the restrictions during the sales?
Only goods may be offered for sale that: (1) the retailer has in its possession at the beginning of the respective sales period; and (2) that it has offered for sale at least 30 days before the beginning of that period.
The rules on price reduction announcements apply during the sales periods. Therefore, retailers must indicate the reference price next to the reduced price (see part one).
What is the waiting period?
For the clothing, leather goods and footwear sectors, the law prohibits price reduction announcements that take effect during a period preceding the sales period.
The waiting or pre-sales period is the one month period before the beginning of the sales period, which is from:
- 3 December to 2 January inclusive (when 3 January is a Sunday, then the waiting period is from 2 December to 1 January);
- 1 June to 30 June inclusive (when 1 July falls on a Sunday, then the waiting period is from 31 May to 29 June).
The prohibition for the clothing, leather goods and footwear sectors also entails a ban on the distribution of titles entitling a reduction in prices during the same waiting period.
The prohibition on announcing price reductions during the waiting period does not apply to offers for sale and sales made during commercial events organised during the waiting period provided they are organised by or with the participation of local business groups and have a maximum duration of four days per waiting period.
During this waiting period, joint offers (e.g. "Buy one, get one free") are possible and widely used in practice.
Conclusion
The rules on sales seem to be well known, yet in 2023, just over a quarter of inspections by the Economic Inspection relating to sales revealed a breach of the law. The more recent rules on advertising price reductions and indicating the reference price are the element that retailers continue to correctly apply.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
