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Will we avoid fake discounts this Christmas?

Black Friday and the pre-Christmas promotions and then the post-Christmas discounts of retailers are approaching and with them necessarily a sea of discounts and customer bargains. However, from time to time the media, even with large and established retailers, reveal that the discounts they advertise are a bit bogus. In fact, the original price was not nearly as high as they advertised as part of the discount promotion. However, that is something that Members would like to put a stop to. When will we see that?

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We are obliged to do so by European Union legislation, which the government has brought into force with a bill that was approved by MPs last Friday. The proposal amends the Consumer Protection Act, and it is mostly in the consumer’s favour.

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How do fake discounts work?

An important change for traders who want to offer goods at a discount will in future also be the obligation to indicate the price at which the product was sold in the previous period. This should make it much harder to give false discounts.

The principle of false discounts can be twofold. Either an e-shop (or a brick-and-mortar shop) gives a false original price and tells us, for example, that a T-shirt has been reduced from CZK 1,000 to CZK 500 (but was sold in the previous period for CZK 700). The second, more laborious, way is short-term pricing of goods (i.e. price increase), for example, a week before the discount event, so that the shop can then state the “true” discounts it has prepared for the customer. In both cases, retailers take advantage of the psychological moment when the customer is more likely to make a purchase decision if he or she feels that he or she is in the presence of an extraordinary and significant discount.

In the event of a discount, traders will now have to state the lowest price at which they sold the goods for a period of not less than 30 days before the promotion was first applied. If they have offered the goods for a shorter period, they will state the lowest price for the elapsed period. The only exceptions are food and other perishable or short-lived goods.

The price information will typically be displayed by retailers on the website offering the specific product, but should not apply, for example, to advertisements, product catalogues, promotional leaflets or loyalty schemes, which typically also offer discounts.

Tip: Do you feel discriminated against as a consumer? Have you been put at a disadvantage in a hotel, shop or restaurant just because you belong to a certain nationality or have a darker skin colour? How far does the freedom of enterprise and autonomy of will of entrepreneurs extend and what can already be considered discrimination against consumers? This is the subject of our article.

Fake reviews

The law also targets another practice, which is fake reviews. In an attempt to sell as many goods as possible, some traders write customer reviews on behalf of fictitious customers. This will no longer be possible either. In the case of reviews, sellers should provide clear and truthful information that the reviews were given by real people who bought the product. Publishing fake reviews will be an unfair commercial practice under the amended law. Sellers should verify that the review actually comes from customers who have purchased the product.

How can customers defend themselves?

If you feel aggrieved by a seller’s unfair practice after the amendment takes effect, you will have the right to withdraw from the contract within 90 days (unless the seller proves that this is unreasonable given the seriousness of the unfair practice). You could also ask for a reasonable reduction in the price.

Tip: How can I proceed with consumer disputes if I want to use out-of-court settlement? This is the subject of our article.

Double product quality

The new amendment also emphasises the prohibition of any marketing of a product if it would be sold as identical in at least two other EU Member States, provided that the product has a substantially different composition or characteristics (unless justified by legitimate and objective facts). This is a further avoidance of the double quality of products, which the Czechs have already enforced in the case of foodstuffs.

Withdrawal from the contract of purchase

Another novelty brought by the amendment is the extension of the withdrawal period from 14 days to 30 days. This option cannot be used for any purchase, of course, and not even for distance purchases (i.e. typically via the internet on an e-shop). It does, however, apply to the purchase of goods outside the business premises, typically in the form of various street offers, door-to-door salesmen or even the infamous trips involving the display and offer of goods of varying quality.

When will we see the change?

The amendment, which takes over the rules of the new European regulations, has now been referred to senators for approval. According to the deadlines common to our legislative process, we will not only see changes this Christmas, but in the months after. According to the European directive, the new rules were supposed to take effect by 28 May 2022, which the Czech Republic failed to meet.

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Author of the article

JUDr. Ondřej Preuss, Ph.D.

Ondřej is the attorney who came up with the idea of providing legal services online. He's been earning his living through legal services for more than 10 years. He especially likes to help clients who may have given up hope in solving their legal issues at work, for example with real estate transfers or copyright licenses.

Education
  • Law, Ph.D, Pf UK in Prague
  • Law, L’université Nancy-II, Nancy
  • Law, Master’s degree (Mgr.), Pf UK in Prague
  • International Territorial Studies (Bc.), FSV UK in Prague

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