The use of prices within advertisements is not uncommon since it is an effective way to advertise. It is a way of luring and enticing consumers with lower prices compared to other stores or with a reminder of the money they could save. There are several types of price advertising: prize competitions, promotional gifts, price display regulations, rebates & special offers, and loss leaders.
The success of a competitor of this kind of price advertising depends, at least partly, on the exercise of judgement, skill, or knowledge by whoever is participating. Article 22 of Law 29/2009 of 30 December 2009 regulates prize competitions and states what is an unfair manner of setting up a prize competition.
A promotional gift is another manner to advertise using prices. Article 32 of Law 7/1996 of 15 January 1996 states that either a gift or a type of sweepstakes may be offered with the sale of a specific product. A promotional gift that is entirely disproportionate to the product involved might be violating the general provision of the General Advertising Law § 6, which requires observance of the fundamental principles of legality, truthfulness, genuineness, and free competition.
Price display regulation
Another tactic used to advertise is price display regulation. When misused, it can fool consumers and lead them to purchase something at a price they were not expecting. Article 10(f) of The Law of Services of the Information Society states that when a price reference is made, the relevant business must know the exact price of the good and whether it includes delivery costs or taxes.
Rebates & special offers
Rebates and special offers are also included as a tactic under the law of advertisement. A rebate is a return of a portion of the price from the seller to the buyer, usually contingent on the purchase of a specific quantity of a product. Law 7/1996 of 15 January 1996 is the governing law on rebates. It states that the sale of rebates occurs when the same items, which are normally sold at a lower fixed price before the sale, are offered in the same establishment. Articles 24 — 26 specifically deal with what exactly is allowed concerning rebates. Sales may take place in seasonal periods of greatest commercial interest and is at the discretion of the merchant, just as the duration of the sales. Additionally, it is prohibited to advertise or sell damaged items or items that were not for sale before the start of the sale.
This technique is used to advertise a good or service at below cost price so that customers will be lured in and perhaps purchase other goods or services inside the store at a full price. The General Agreement on Tariffs and Trade of 1994 sets out a number of fundamental principles of trade between World Trade Organisation members. Article VI expressly authorizes the imposition of an anti-dumping duty on the imports from particular countries.
Justine Matthys & Karl H. Lincke
This article is not considered as legal advice