Guidelines on Price Transparency

CCS developed a set of Guidelines on Price Transparency to provide greater clarity to suppliers on what pricing practices could potentially infringe the CPFTA. These Guidelines will come into effect on 1 November 2020 and apply to all suppliers, whether operating online or in physical stores.

Transparent and accurate prices allow consumers to make informed purchasing decisions which are essential for a well-functioning market. The Guidelines examine common pricing practices that may mislead consumers and infringe the CPFTA, and include actions that suppliers should take to ensure that prices and their accompanying terms and conditions are accurate and communicated clearly. The Guidelines also set out the good practices that suppliers are encouraged to adopt to help minimise potential disputes with consumers.

The Guidelines cover four key pricing practices – drip pricing, price comparison, discounts, and use of the term “free”.
Suppliers or businesses can enable consumers to make informed choices by adopting good practices in the following four areas:

(a) Drip Pricing

Suppliers should ensure that any unavoidable or mandatory charges (e.g. taxes, surcharges, service fees, etc.) are included in the total headline price. Where such charges cannot be reasonably calculated in advance, suppliers should disclose the existence of such charges in a clear and prominent manner together with the headline price. The disclosure should also include any subsequent fees that a supplier or third party may impose on a consumer.
Suppliers are also encouraged to adopt an “opt-in” or “opt-neutral” approach to bring consumers’ attention to optional add-ons. This enables consumers to actively check/tick a box to select the specific add-ons or options they want.

(b) Pricing comparison

Suppliers should ensure comparisons made with other suppliers’ prices are not false or misleading. To reflect prices truthfully, suppliers should conduct their research regularly and compare only prices of goods or services that are accepted to be similar or equivalent by consumers or trade norms. Offering to provide refunds does not absolve the suppliers from the need to conduct necessary checks/research and ensure that any price representations made are not false or misleading.
Suppliers are encouraged to check and update reference prices used for price comparison regularly and to keep records of them so as to be able to prove that the price comparisons made are not false or misleading.

(c) Discounts

When suppliers offer a discount or make a comparison with its usual/previous price (e.g. through strikethrough pricing) to represent a price benefit, they should ensure the discount or price benefit offered is genuine and provide a valid basis for the discount or comparison, so that consumers are not misled by the savings they may achieve.
There it is a time-limited discount, suppliers should state the time period clearly and accurately to avoid misleading consumers. Suppliers are also encouraged to keep records of past sales and prices to prove that the past prices and discounts given are genuine.

(d) Use of the Term “Free”

Suppliers should ensure any representation that the price of a good or service is $0 or “free” is not false or misleading. Any qualifiers, subsequent/deferred charges, and key terms and conditions imposed on consumers as a result of their acceptance of the good or service should be stated clearly and prominently together with the “free” representation.
In the case of free trials, suppliers are also encouraged to notify consumers before the end of the trial period and provide consumers with clear information on any subsequent chargeable fees as well as the cancellation process.

For a quick infographic summary of the four key pricing practices, click here.

For the Chinese version of the infographic summary, click here.

For the Malay version of the infographic summary, click here.

For the Tamil version of the infographic summary, click here.

To download the full brochure on the Guidelines on Price Transparency, click here.