The Trade Practices Amendment (Clarity in Pricing) Act 2008 commences on 25 May 2009. If you supply goods and services to personal consumers (rather than to other businesses) you will need to comply with the new law when you make price representations to your customers.
The new law requires that from 25 May 2009, you must give the price for your goods or services as a single all-inclusive figure (including GST).
Included in that single price must be all amounts that are quantifiable at the time the price representation is made, specifically:
- any charges payable by the customer to your business (other than charges payable at the customer's option);
Example: if customers can only pay by credit card, and your business imposes a compulsory credit card fee, this must be incorporated into a single price (saying 'fees and charges apply' will not be sufficient to comply)
- any taxes, duties, fees, levies or charges imposed on your business in relation to the supply (e.g. GST but not stamp duty);
Example: if you previously advertised your product as $99 + GST, you must now advertise it as "$108.90"
and
- fees, levies or charges if that amount is payable under an " agreement or arrangement under legislation and would have otherwise been payable by the customer.
If you previously used component pricing in your advertising to comply with disclosing the full cash price, you can continue to do so as long as you also display the single price in a manner at least as prominent as the components of the price.
If your business delivers goods, and the minimum delivery charge is known (but this may vary depending on delivery requirements), you must also specify the minimum delivery charge (however the delivery charge does not need to be included in the single price).
To ensure your business is compliant from 25 May 2009, you should now:
- review your current pricing representations in standard form contracts, websites, emails etc to ensure they will comply;
- review all current advertising including TV, print, online, mail and radio that will be in circulation on/from 25 May 2009 (the new law applies to prices stated orally, so rethink the wording, volume and timing of your price points);
- review your business practices to ensure your business units know what amounts are quantifiable and required to be included in the "single price";
- ensure your marketing and administrative teams have the necessary information on changes in taxes, duties, and other fees which will be required in the "single price" to comply with the new law when preparing brochures, ads and other collateral;
- ensure you withdraw non-compliant collateral from circulation prior to 25 May 2009 and replace it with collateral reflecting the new pricing requirements;
and don't forget your other obligations under the Trade Practices Act 1974 still continue to apply (e.g. misleading and deceptive conduct is prohibited under s 52 of the Act).
If your business does not adhere to the "single price" requirements, then from 25 May 2009 your corporation will have committed a strict liability offence and may face fines up to $1.1 million.
Swaab was recently named a 2009 Winner in the ALB Employer of Choice awards, and was winner 'Best Law Firm in Australia (Revenue < $20m)' and 'Attribute Award for Exceptional Service (Australia Wide)' in the 2008 BRW- Client Choice Awards.
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.
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