The UK Office of Fair Trading (OFT) has issued a warning today (2 December) to retailers over misleading promotion offers.
The OFT urged businesses to review their use of pricing practices to ensure they comply with fair trading laws, or risk enforcement action.
It said the practices having the greatest potential to cause harm are “drip pricing”, time-limited offers and “baiting” sales.
“Drip pricing” is where optional or compulsory price increments are added during the buying process such as taxes, card charges and delivery charges.
So-called “baiting” sales are where businesses have only a small proportion of stock available at the advertised offer price.
The OFT said the practices were not automatically unlawful but that their use depends on factors including the specifics of an advertising campaign.
The watchdog has published a framework that sets out the criteria it will use in prioritising enforcement action against traders engaged in pricing practices causing the most harm to consumers.
For example, the OFT said, on drip pricing, business that ensure all compulsory charges are included in the headline price, and make details of all genuinely optional charges available at the early stages of the buying process are less likely to be subject to enforcement action.
OFT chief executive John Fingleton added: “Misleading pricing is not only bad for the consumer, it is also bad for competition, and creates an uneven playing field between fair dealing businesses that stick to the spirit of the law, and those that push the boundaries too far.”