In today’s hyper-competitive marketplace, pricing isn’t just about turning a profit — it’s about playing fair, staying transparent, and above all, staying within the lines of the Australian Consumer Law (ACL).
With inflation on the rise and cost of living pressures squeezing consumers, pricing has never mattered more. Businesses need to be savvy not just about setting the right price, but about how they communicate those prices — or risk facing serious penalties.
Finding the Balance
For any business, pricing is a delicate balancing act. Set prices too high, and consumers walk away. Set them too low, and profits suffer. But beyond these business basics, there’s a legal layer that owners must understand: Your pricing practices must comply with the ACL.
Your Legal Obligations:
Businesses are free to set their own prices — based on costs, market trends, or profit goals — but they must not mislead or deceive customers in the process.
Key obligations are:
Clear Pricing
¨Prices must be easy to understand and include all taxes, levies, and fees upfront.
Misleading Pricing
¨Avoid price tags or ads that create a false impression or don’t reflect the actual cost.
Drip Pricing
¨All fees must be disclosed as early as possible — adding unexpected costs at the later stages of the booking process will be a breach.
Multiple Pricing
¨If two prices are displayed for the same item, the business must charge the lower price — or remove the item until the error is fixed.
Bait Advertising
¨Don’t advertise products at low prices if you have limited stock or don’t plan to supply them at all. That’s misleading.
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Transparency Matters:
The ACCC has ramped up its focus on dodgy pricing, especially in the retail and supermarket sector. Two key areas under the microscope are:
- Drip Pricing
This tactic is associated with online transactions, and it involves revealing the true cost of a product bit by bit —It might start with a seemingly low price, but by checkout, the price has ballooned thanks to hidden booking or service fees.
Case in Point: Dendy Cinema Pty Ltd- Dendy pays penalties for alleged ‘drip pricing’ practices | ACCC
- Failed to show total ticket price upfront, hiding unavoidable booking fees until the final booking stage.
- Penalty: $19,800
Case in Point: Webjet- Webjet to pay $9m in penalties for misleading statements about airfare prices and bookings | ACCC
- Between 2018–2023, advertised airfares while excluding mandatory fees.
- Final price was up to 3x higher than what was advertised.
- Penalty: $9 million
- Price Gouging
The ACCC is also keeping a close eye on supermarkets for misleading “discounts” that aren’t really discounts at all.
Case in Point: Coles & Woolworths ACCC takes Woolworths and Coles to court over alleged misleading ‘Prices Dropped’ and ‘Down Down’ claims | ACCC
- Allegedly raised prices temporarily, then promoted them as “specials.”
- In many cases, the “discounted” price was still higher than the original price.
- ACCC called it illusory pricing. While price gouging wasn’t proven, the case sent a strong warning.
Key Takeaway: Transparency is Non-Negotiable
If you’re in business, price fairly — and more importantly, price honestly. When determining a price for goods or a service consider the following:
- Is your total price clearly displayed?
- Are all fees disclosed upfront?
- Are your advertised discounts genuine?
- Is your pricing consistent across platforms?
By being upfront, clear, and compliant, you protect not just your customers, but your reputation and bottom line.
This article is general in nature. For tailored commercial advice please contact one of our experienced solicitors on 07 5444 4750.