MARK UP FULL PRICE: New rules on advertising goods and services

Published by Law Society of New South Wales

There are new laws regulating the way businesses advertise the price of goods and services with possible fines of up to $1.1 million for a corporation and $220,000 for an individual failing to specify the full price.

Businesses are now required to specify as a single figure the full price of goods or services “of a kind ordinarily  acquired for personal, domestic or household use or consumption”.

This means the GST and all other taxes, duties and levies must be included in the cost price of the goods, and the single figure must be displayed in a prominent way in advertising. This includes newspaper advertisements, promotional brochures, price lists on websites, and even when providing prices verbally.

Businesses will not be required to specify charges for delivering goods to a customer as part of the single figure, though they will have to specify the minimum amount of any delivery charge which will be incurred by the customer.

The single price should be shown in the same or larger lettering than any component of it by using such devices as bold type or underlining. A further implication is that the use of asterisks may no longer be permitted as, by using an asterisk, the single price is not as prominent as the component prices if it is positioned at the bottom of the  advertisement.

Business may prefer to prepare both GST-inclusive and -exclusive price lists depending on the nature of the goods sold, if ordinarily selling commercial products as well as those ordinarily acquired for personal use, or if companies deal with incorporated and unincorporated business customers. But it may be more prudent for such businesses to imply use GST-inclusive price lists for all their goods and services and customers to avoid potential problems.