Need to know
- New data shows discount promotions at popular pharmacies are confusing consumers
- Tags highlighting savings are referring to prices pharmacies may never have charged in the first place
- The promotions are causing consumers to think pharmacy deals are saving them more money than they really are
Shelves lined with colourful specials tags are a common sight greeting shoppers at major Australian chemist chains.
But new data suggests these labels are confusing consumers and leading them to overestimate the savings they offer.
CHOICE has been getting feedback from Australians on the specials labels Chemist Warehouse, Terry White and Priceline put on their shelves.
A sizeable portion of consumers we surveyed could not easily tell if these tags represented a discount.
Those that did believe they signalled savings tended to overestimate the discounts on offer.
Many thought the specials were providing a discount on prices that pharmacies may never have actually sold the products for in the first place.
Promotional tags not so special
Colourful promotional labels line the shelves of Australia's major pharmacies.
"We regularly hear from consumers who are frustrated by how prices are displayed at many major pharmacies," says senior campaigns and policy adviser at CHOICE Bea Sherwood.
"Discounts are everywhere you go in pharmacies," she adds. "Walking down the aisles, you're bombarded by yellow and pink sales tags."
Many of the tags seen by CHOICE were placed on top of a product's usual shelf price.
Some display a new price for the product, while others simply draw attention to the existing price with bright colours and phrases proclaiming value for money.
Consumers quizzed on specials
To see how these promotions might be influencing consumers, CHOICE showed over 1000 Australians* photos of promotional tags displayed in Chemist Warehouse, Terry White and Priceline stores.
The photos depicted the promotions as they were found in outlets around Sydney in November last year.
In the cases of Chemist Warehouse and Terry White, the promotions were often covering the shelf sticker showing the price the product is usually sold for and proclaiming a new 'special' rate.
The tags contrasted this promotional rate with a figure they said was the product's recommended retail price (RRP), in order to highlight a dollar-value saving available to shoppers.
Tags at Priceline, meanwhile, didn't claim a specific discount amount, but drew attention to a product's going rate with phrases such as "Great value" and "Lower prices".
Specials causing consumer confusion
We asked the consumers we surveyed whether they believed the tags represented a discount on a product's usual price and how easy it was to ascertain this.
"One of the most striking results was that roughly a third of respondents across the labels we tested either were not able to quickly and easily determine if the product was discounted or weren't sure if it was discounted at all," says Sherwood.
"That is a real concern, as discounts should be clear and transparent, not confusing. Clear discounts help shoppers know if they're really getting a good deal."
Chemist Warehouse and Terry White didn't respond when asked if they wanted to comment on suggestions their specials are confusing.
Priceline told CHOICE one of its labels ("Love Lower Prices") did represent a discount, but another ("Great Value") didn't.
CHOICE got feedback from consumers on a number of different labels we found in pharmacies.
Consumers overestimating discounts
Respondents who believed the prices on promotional tags represented a saving on the product's usual price were asked how much they thought the discount was worth.
In most cases, respondents used the RRP listed on the tag to calculate how much they were saving by buying the product being promoted.
For example, respondents were shown a photo of a tag accompanying a tube of toothpaste being sold at a Terry White store.
The tag listed the product's $6 price as a discount from its RRP of $11.99, and 71% of survey respondents agreed the sticker represented a $5.99 saving on the product's usual price.
Lifting the tag revealed the usual shelf price for this product didn't match the RRP
However, lifting the tag revealed the usual shelf price for this product didn't match the RRP.
Rather, it was $8.99 – Terry White later confirmed to CHOICE that the toothpaste hadn't been sold at the store where we took the photo at the RRP rate mentioned on the tag.
In fact, in all the examples we found of pharmacies using RRPs to advertise savings, these prices were more expensive than the usual shelf listings beneath or beside the tags.
What does the RRP at a pharmacy actually mean?
Several labels promised savings on prices the chemist wasn't actually charging.
Information provided by Chemist Warehouse and Terry White suggests many of the RRPs these retailers display are prices that consumers may never actually have to pay.
Terry White told us the RRPs mentioned on its tags are prices given to it by the suppliers of those items and aren't meant to reference a price the products were previously sold for by that store.
Chemist Warehouse didn't respond to our question about whether the products we found were ever sold for their listed RRPs. But on its website, the retailer says RRPs listed in savings comparisons online are usually a supplier's recommended price.
The company says it only displays these RRPs if the product was sold at or above that price in at least 5% of transactions across most major and independent pharmacies in Australia in the last two months.
Chemist Warehouse says it monitors transactions by looking at Australian Pharmacy Transaction data provided by IQVIA, a global healthcare data technology company.
RRP practice 'potentially misleading'
The ACCC says a price display can be misleading if it's being compared to an RRP that the product was never sold at, or wasn't sold at for a reasonable time.
With over half of survey respondents regularly referring to RRPs when calculating the value of pharmacy promotions, Sherwood says many consumers may be overestimating the value of deals on offer.
If the pharmacies have never offered those products at that RRP, it could be potentially misleading to refer to a dollar-value reduction from the RRP as the selling point of the discount
CHOICE senior campaigns and policy advisor Bea Sherwood
"If the pharmacies have never offered those products at that RRP, it could be potentially misleading to refer to a dollar-value reduction from the RRP as the selling point of the discount," she explains.
"This practice might make a consumer more likely to think that a product is good value, when in fact the savings may be much smaller than they appear. Consumers could end up purchasing more than they need or not bothering to compare prices with other retailers."
Chemist Warehouse and Terry White didn't respond when asked if they wanted to comment on suggestions their promotions are potentially misleading.
Terry White didn't directly address the comments, but has previously told CHOICE it lists supplier-provided RRPs in order to provide a reference for savings calculations in instances where pricing is varied across its network of pharmacies.
How to check if a pharmacy discount is a good deal
When presented with a pharmacy special claiming to shave a certain amount off your shop, don't just rely on the advertised RRP when appraising these deals.
Look beneath the special tag for the usual shelf price to see what the reduction on the usual product price at that store is – this will tell you if the deal is worth taking advantage of by buying multiple units, for example.
It also pays to compare the price a pharmacy is advertising with the going rate for the same product at other outlets and look at unit pricing to see where you could be getting better value across brands and pack sizes.
*CHOICE Consumer Pulse January 2025 is based on an online survey designed and analysed by CHOICE. 1,077 Australian households responded to the survey with quotas applied to ensure coverage across all age groups, genders and locations in each state and territory across metropolitan and regional areas. The data was weighted to ensure it is representative of the Australian population based on the 2021 ABS Census data. Fieldwork was conducted from the 14th of January to the 31st, 2025.
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