La. Admin. Code tit. 16 § III-305
Current through Register Vol. 50, No. 11, November 20, 2024
Section III-305 - Comparison to Seller's Own Former PriceA. It is a deceptive act or practice for a seller to compare the seller's current price with the seller's former price for any merchandise unless: 1. the former price is a price at which a substantial number of sales were made by the seller during the three months immediately preceding the price comparison;2. the former price is a price at which a substantial number of sales were made by the seller and the seller clearly and conspicuously discloses the dates during which substantial number of sales were made by the seller at the former price;3. the former price is a price at which the seller offered the merchandise for reasonably substantial period of time in the recent, regular course of its business, openly, actively, and in good faith, with an intent to sell the merchandise at that price.B.1. This rule gives you three alternatives for supporting savings claims or price comparisons that are based upon your own former prices. You may make claims or comparisons based upon your own former prices if you can show that you either: a. sold a substantial number of goods at your former price during the three months before your ad; orb. sold a substantial number of goods at your former price but during some other period that the three months before the ad and have identified that period in the ad; orc. made an honest and realistic offer over a reasonably substantial period to sell goods at that price. In other words you weren't just marking your goods up to an unrealistically high "promotional" price so you could later advertise an exaggerated mark down.2. We purposely used the words "substantial" and "reasonably substantial" in the rules to allow you some flexibility in supporting your savings claims or price comparisons. You must be able to establish that your former price is "real" and not exaggerated. We understand that what is necessary to establish this will vary depending upon each seller's circumstances. What is substantial for one seller may not be for another. For example, three sales of a $1,000 sofa may say as much about the reality of that price as 100 sales of a $15 wall mirror or a $50 computer software package. Three sales may be a substantial number for a small seller, but may be insubstantial for a larger one.3. An important factor that we will consider is the proportion of your total sales that are made at the advertised former price. If you are making over half your sales at a price advertised as your "regular price," you shouldn't have any trouble showing that the advertised regular price is, in fact, your regular price. On the other hand, if sales at your advertised "regular price" make up less than 25 percent of your total sales, you may find it hard to support your claim that this price is really your regular price.4. If you fail to make substantial sales at your former price, the absence of sales raises the question of whether it was realistic to expect substantial sales at the former price. In that case, you will need to be able to show that you were making an honest and realistic effort to sell the goods at the former price. This can be done by showing that you offered the goods for a "reasonably substantial period of time" at a price realistically intended to actually sell the goods and not just to establish an inflated comparison price.5. What is a "reasonably substantial period of time" will depend on the normal selling patterns in your industry or in your particular business. Goods that are offered at a former price for more than half the typical selling period for those goods will almost certainly meet the reasonably substantial standard. Goods that are offered for less than a quarter of the typical selling period will almost certainly not meet that standard.6. An important factor in determining whether your former price was realistic is how it compares with your average retail mark up on the goods you do sell. If your goods sell, on average, at a 50 percent markup over cost, it is probably unrealistic to expect substantial sales of similar goods at a price based upon a 100 percent markup. Example:
Sale |
Regularly: | $29.99 |
Sale Price: | $19.99 |
a. This price tag is permitted as long as you can support the claim that $29.99 was your regular price. You can do that by showing that either: i. you had substantial sales of this item at $29.99 during the three months before it went on sale; orii. you offered it for sale at $29.99 for a reasonably substantial period before the sale in an honest and realistic effort to sell the item. *Substantial sales in some other period will not support the claim in this ad because the tag does not disclose a different selling period.
La. Admin. Code tit. 16, § III-305
Promulgated by the Department of Justice, Office of the Attorney General, LR 21:33 (January 1995).AUTHORITY NOTE: Promulgated in accordance with R.S. 51.1 et seq.