Component pricing

New legislation means sellers must quote a single price for products.
 
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  • Updated:22 Apr 2008
 

01.Component pricing

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In brief

Success! New legislation means businesses now must display the total miminum price a consumer must pay for a single product or service.

The issue

It’s annoying to be quoted the price for something only to find there are extra taxes not included in the quote, or additional charges you hadn’t expected.

In recent years this practice was increasingly common. New car advertising often showed recommended retail prices that didn't include so called 'dealer delivery charges' (or stamp duty), airline ticket prices didn’t include fuel surcharges, government taxes and sometimes unavoidable credit card fees.

CHOICE has long campaigned for laws to require sellers to state the full price in their advertisements and in other statements about what they are selling.

Indeed most people thought this was the law until a High Court case a few years ago gave a very narrow interpretation of the relevant part of the Trade Practices Act (ACCC vs Dell Computers Pty Ltd [2002] FCA 847).

Now the Commonwealth Government has released new legislation designed to fix the problem. CHOICE is very pleased progress has finally been made.

Clarity in pricing legislation

The Trade Practices Act (Clarity in Pricing) Amendment means that businesses are now required to prominently display the total minimum price a customer will pay for a single product or service. The figure must include any of the "bits and pieces" that come with a product or service, for which payment cannot be avoided. Businesses are still allowed to display components of the price, but a total price including all the non-optional components, such as stamp duty, GST and any surcharges must be dsplayed just as prominently. Any business that does not comply with the new legislation will be subject to a maximum fine of $1.1 million.

The new law also requires restaurants that charge a surcharge on weekends to have a separate menu for those days which displays the price including the surcharge.

The new law does not include delivery charges, packaging or any optional extras. However minimum delivery charges should still be included separately in the advertisement.

CHOICE is pleased with the new legislation and believes it will result in manufacturers removing misleading information from their websites and advertisements.

More information
ACCC website 
CHOICE submission: Component pricing

 
 

 

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