Some of the country's best-known furniture and flooring retailers have moved to change thier pricing practice after the Office of Fair Trading investigated the duping of consumers by these and other retailers through the practice of price-referencing.
A Share & Sons Ltd (trading as SCS), Carpetright Plc, Dreams Ltd, Furniture Village Ltd and Homestyle Operations Ltd’s trading brands Harveys and Bensons for Beds have each confirmed their commitment to using genuine reference prices and, without any admission of liability, have made changes to their reference pricing practices. The OFT has therefore closed its investigation.
Reference prices are used by retailers across the furntiure and flooring sector to advertise a bargain to shoppers, for example by comparing a lower current price against a higher past price, such as SALE – Was £800, Now Half Price £400.
The OFT maintains that consumers should be able to trust that such price comparisons are fair and meaningful and that the advertised savings (or price advantages) are genuine. Improper use of reference prices can mislead consumers, for example in circumstances where the ‘discounted’ price is in fact the normal retail price of a product.
Gaucho Rasmussen, OFT director, Goods and Consumer Group said: "Retailers advertise bargains and discounts by referring to a previous or future higher price. It’s a powerful marketing tool which, when used properly, provides a helpful and easy way to demonstrate to shoppers the value of discounts and savings. We are therefore pleased that these retailers have confirmed their commitment to using genuine prices."
Alex Chisholm, chief executive of the Competition and Markets Authority (CMA), which succeeds the OFT on 1st April, said: "The CMA will monitor pricing practices within this sector to check whether businesses are complying with their legal obligations. Companies are advised to satisfy themselves that their practices are in line with the law because failure to do so could risk enforcement action."
