New nationally representative data from CHOICE has found pricing tactics at major chemists are confusing customers, with roughly 1 in 3 people finding it hard to tell if sales tags represent a discount.
CHOICE asked over 1,000 consumers if they could tell if price tags photographed at Chemist Warehouse, Priceline and Terry White represent a discount on the usual price, and if they could quickly and easily tell if it was a discount or not.
Around 1 in 3 of people found it difficult to easily tell if the colourful promotional tags often found at pharmacies represented a discount. Those who believed the tags signalled savings usually overestimated the discounts on offer, and many thought the tags indicated discounts on a price the pharmacy may never have actually sold the product for in the first place.
"We regularly hear from people who are frustrated with how major pharmacies communicate prices and specials in store. Our new research has found that those yellow and pink sales tags consumers are often bombarded with in pharmacy aisles are highly confusing," says Bea Sherwood, Senior Campaigns and Policy Advisor at CHOICE.
Terry White 'RRP $11.99 / Save $5.99 tag'
"In this example, over two thirds of consumers thought Terry White was providing a $5.99 discount on this toothpaste. You can see why, as the tag lists the product's $6 price as a discount on the RRP of $11.99. However, when we asked Terry White if they'd previously sold the toothpaste for $11.99, they confirmed it had never been sold at that price at the store where we took the photo," says Sherwood.
Chemist Warehouse 'Cheaper at warehouse prices / $0.51 off RRP' tag
"This Chemist Warehouse tag highlights that customers will make a $0.51 saving on the RRP. Over half of our respondents agreed that $0.51 was the discount on offer. Chemist Warehouse didn't provide evidence they had ever sold this product for the RRP and lifting the tag shows that the usual shelf price is the same as the 'cheaper' price," says Sherwood.
Priceline 'Great value' tag
"The price of this lip balm at Priceline is supposedly 'great value', but when we asked Priceline to confirm whether it was a discount or not, they told us it wasn't. While the label technically doesn't claim to offer a discount, the use of the value claim and the bright pink colour may cause consumers to believe the item is on sale," says Sherwood.
CHOICE is concerned over the lack of transparency on pharmacy labels, particularly the use of RRPs, which may result in people overestimating the value of the deal on offer.
"If the pharmacies have never offered those products at that RRP, consumers may be misled about how much they're really saving, making it harder for people to get the best value. There has been a race to the bottom on these tactics, which makes it hard for businesses using transparent pricing to compete," says Sherwood.
"CHOICE welcomes the government's commitment to regulate confusing supermarket price displays and promotions. Our research shows that confusing price displays aren't limited to the supermarkets. Big businesses like pharmacies, department stores, pet stores and hardware chains employ many similar pricing tactics and should be addressed next," says Sherwood.
Images available here: https://drive.google.com/drive/folders/1xysbKXUdMC68Z4-3l-m24iOgAHHwc-P6?usp=sharing
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