Legislative Decree of March 7, 2023, no. 26, implementing Directive (EU) 2019/2161 (Omnibus Directive), applies—among the various consumer protection changes discussed in a previous article—a new discipline regarding price display.
This discipline essentially applies in the following cases:
- clearance sales
- end-of-season sales (sales)
- a promotional sale, with a specific rule if the product has been on the market for less than thirty days
- an announcement addressed to all consumers to inform them that a product will be discounted
It does not apply if:
- the product is perishable food or agricultural
- it is a below-cost sale
- it is a launch price, characterized by subsequent price increase announcements
How to manage these changes in an e-commerce site?
Let’s analyze price management in Open2b Commerce Ready
Open2b Commerce Ready already allows you to display a reference List Price and a Sale Price that can be lower.
If the sale price is lower, the system displays the strikethrough list price, the savings amount with the percentage, and the product’s sale price.
Beyond this basic function, you can manage promotional prices using the Promotions system.
Promotions can be applied based on various criteria (directly on catalog products, department, manufacturer, attribute... or on the cart, with or without coupon, and always also based on Customer Group—groups that Open2b Commerce Ready allows you to create to offer reserved and differentiated conditions). You can also add promotions on shipping.
Still based on Customer Groups, you can decide whether promotions should be applied, for the final sale price calculation, on List Prices (i.e., the reference price) or on the Sale Price.
Let’s use an example: Suppose an item for sale has a list price of €200 and you’ve already set a 20% discounted sale price, therefore €160.
On the site it appears:
List Price: €200
Sale Price: €160
Discount: 20%
You save: €40
One day you might decide to activate a new promotion that includes this item, perhaps a 30% promotion applied to the list price or to the sale price.
If applied to the list price, you would have:
List Price: €200
Previous Sale Price with 20% discount: €160
New Sale Price at 30%: €140
On the site it would show:
List Price: €200
Sale Price: €140
Discount: 30%
You save: €60
If applied to the sale price, you would have a higher discount, therefore:
List Price: €200
Previous Sale Price with 20% discount: €160
New Sale Price at 30% on €160: €112
And on the site it would show:
List Price: €200
Sale Price: €112
Discount: 56%
You save: €88
As you can see, Open2b Commerce Ready displays the real overall discount calculated with reference to the displayed list price.
How to manage the new price rules (the Omnibus Directive) with Open2b Commerce Ready?
Let’s quote below the part of the regulation we need to analyze:
2. After Article 17 of Legislative Decree no. 206 of 2005, the following is inserted:
“Art. 17-bis (Price reduction announcements). - 1. Every price reduction announcement indicates the previous price applied by the professional for a certain period of time before the reduction is applied.
2. For previous price, it is meant the lowest price applied by the professional to the generality of consumers in the thirty days prior to the application of the price reduction.
3. The provision of paragraph 2 does not apply to perishable agricultural and food products referred to in Article 2, paragraph 1, letter m), and Article 4, paragraph 5-bis, of Legislative Decree 8 November 2021, no. 198.”
First of all, this concerns B2C, i.e., retail sales to consumers, not B2B sales between companies, which are not affected by this regulation.
To analyze this rule, it is useful to proceed with some examples:
“For previous price, it is meant the lowest price applied by the professional to the generality of consumers in the thirty days prior to the application of the price reduction.”
What could be the previous price referred to by the rule?
As a rule, if a product is not on promotion, list price and sale price coincide.
So we start from a single price, the €200 in the first example.
In Open2b Commerce Ready this is achieved by associating only the sale price to the product (without a list price), or by setting list price and sale price equal. The site will show a single price.
The purpose of the rule is essentially to prevent a merchant from artificially raising a product’s price, then putting it on promotion and making the discount appear greater than it really is, thus practicing a misleading and consumer-harming sales policy.
Therefore, what the rule requires is that, in promotions, the displayed discount is compared to the lowest reference price of the last 30 days.
And what issues does this bring?
1-If the list price is used and does not change in the 30 days, there is no problem. Any promotions, whether on list or sale price, will refer to the list price shown at the beginning of the 30 days.
2-If the list price is used and changes within 30 days, there is no problem if it decreases. Any promotions, whether on list or sale price, will refer to the lowest list price in the 30 days.
If the list price increases, the problem arises.
A promotion calculated on list or sale price could see the stated discount percentage increase.
Is raising the sale price proportionally a solution? No, because increasing the sale price proportionally would keep the discount percentage, but would not solve the issue since, under the new directive, the promotion should still be calculated on the pre-existing list price, i.e., the lowest one.
On the other hand, displaying two list prices—the lower one on which the promotion is calculated and the higher one due to the price increase—could create confusion, would not be easy to explain to customers, and could be seen as an unfavorable practice, damaging the store’s image.
Another difficulty introduced is the 30-day period to consider.
And if the list price increase is not a “trick,” but a necessity, what choices would the merchant face?
1-Do not run promotions on the product in the 30 days after the price increase
2-Show the new price, keep the lower previous list price visible, and add the discounted sale price and the savings percentage relative to the lower list price.
3-Stop the promotion, if active, and do not run promotions on the product in the 30 days after the price increase
In the second case, from the moment of the price increase, 30 days should pass before moving the promotion calculation to the new price (if still active), or before creating a new promotion based on the higher list price. But the important thing is to display the new increased list price.
Assuming a minimally invasive solution, the site would show:
List Price: €200
Sale Price: €112
Discount: 56%
You save: €88
and you could add a line such as “Reference price applied €220 since 18/05/2023”
The rule does not require specifying a date, but it could be useful to avoid misunderstandings.
The merchant could, for example, add this information in the product description, indicating the new list price.
After 30 days, they would update the lowest list price by replacing it with the new one.
In any case, if a real price increase is expected, it is advisable to include the information at least 30 days in advance, to avoid being blocked for too long. For example a line like “Reference price: € xx” added to the product description.
Let’s continue the analysis with another case: products that have been on sale for a short time:
4. For products that have been placed on the market for less than thirty days, the professional must indicate the period of time to which the previous price refers. Launch prices, characterized by subsequent price increase announcements, are excluded from the scope of this article.
This part specifies that if a product has been on sale for less than 30 days, in addition to the previous price you must indicate the period in which that previous price was applied, unless it is a launch price.
In other words, if I publicly announce that it is a launch price, I am implicitly stating that the product is new and that once the promo price ends, the list price shown will become the price at which the product can be purchased. If I do not explicitly state that it is a launch price, then I must say, according to the rule, how many days the reference list price has been applied when calculating the discount.
Let’s try an example (which would have been appreciated if provided by the legislator...). We could face this situation.
If launch price:
List Price: €200
Sale Price: €112
Discount: 56%
You save: €88
Information, e.g. “Launch price”
If it is not a launch price and the product has been on sale for less than 30 days, for example 20:
List Price: €200
Sale Price: €112
Discount: 56%
You save: €88
Information, e.g. “List price applied for 20 days”
Is it possible to automate these operations?
For the launch price case, our team could, for example (or you could do it independently) add a label, a banner, etc. next to products marked as New in the system.
In a custom procedure developed ad hoc, this process could be automated, for example by setting each new product as a Launch Price product and removing it from New after a preset number of days.
In the case of a product on sale for a short time but not a launch, and assuming you do not plan to increase the list price during the first 30 days, an automated procedure could add the description “List price applied for 20 days,” updating the information until it reaches 0.
5. If the price reduction is progressively increased during the same uninterrupted sales campaign, paragraph 2 applies to the first price reduction and, for subsequent reductions, the previous price is the price without the reduction before the first application of the price reduction.
Finally, if the price reduction is progressively increased during the same sales campaign (e.g., product on sale at €200, discounted to €160 for 20 days, €140 for another 20 days, and finally €112 for another 20 days), the previous price to reference is the same identified during the first reduction (thus €200). Therefore, the same approach above applies, where we suggested adding the new price as an additional informational line.
The decree published in the Official Gazette
Open2b, platform for e-commerce
Our Open2b team always supports online merchants with passion, aiming to help them reach increasingly ambitious goals in a context as competitive as e-commerce, with the support of the Commerce Ready e-commerce platform, developed 100% in Italy and designed for companies that want to develop their projects independently.
To test the features of the Open2b e-commerce platform, with dedicated versions for both B2C and B2B, you can request a free trial and experience the unique flexibility of high-performance, customizable, and reliable solutions.
Tell us about your e-commerce project and you will receive proposals aligned with your needs. Choose how to contact us, by phone at +39 0587-53675 (Mon-Fri 9-13; 15-18.30) or by writing to commerciale@open2b.com