By: Arlan Gates, Sarah Mavula and Jacqueline Rotondi
Whether entering the Canadian market or operating as an established Canadian business, manufacturers and retailers should be mindful of Canadian pricing rules, particularly as they relate to savings and pricing claims. This has never been more important given the various high-profile pricing investigations involving large Canadian companies, from clothing and home furnishings retailers to e-commerce businesses and telecommunications providers. Recently, through its investigation into the retail pricing practices of a regional Canadian furniture retailer, the Competition Bureau of Canada (“Bureau”) has expanded the list of potentially problematic pricing claims to now include “urgency cues”, i.e., the use of marketing tactics to increase a consumer’s perception of having to act immediately and/or to elicit a “fear of missing out”. While it has always been required that businesses make technically accurate and truthful pricing and saving claims, they also need to ensure that their pricing practices and consumer/user experiences overall do not raise deceptive marketing concerns, including by creating an unwarranted sense of urgency.
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Given the effectiveness of discount marketing, the promotion of sales, deals and clearances has long been an attractive tool for retail marketers, but it remains a double-edged sword. Savings claims, like general marketing and advertising claims, must be accurate and truthful and are subject to strict requirements under the Canadian Competition Act (“Act”) to ensure they do not imply a misleading regular price. Discount marketing continues to be an enforcement priority for the Bureau, and manufacturers and retailers alike must exercise caution when adopting such strategies.
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