“Compare At” & Reference Pricing: How to Prove a Deceptive Savings Claim
Context. “Compare at,” “Reference price,” “List/MSRP,” “Was/Now,” and strikethrough prices are powerful anchors that shape a shopper’s perception of value. They are lawful only when they reflect a truthful, verifiable basis. If the reference price never existed (or did not prevail for a meaningful period in the relevant market), regulators and courts often treat the claim as deceptive. This guide shows how reference pricing works, where it goes wrong, and—most importantly—how to prove deception or design a compliant program.
1) Reference pricing 101: the vocabulary that matters
- Former/“Was” price: a prior selling price used by the same seller (e.g., Was $129, now $89).
- List/MSRP: a manufacturer’s suggested price for the item/SKU.
- Compare at / Reference: a benchmark based on prices at other retailers in the relevant market.
- Strikethrough: visual cue that a higher price has been replaced by a lower current price.
- Pseudo-reference: a fabricated benchmark (e.g., inflated “list” price not used by any market participant).
Behavioral economics lens. Reference prices create anchoring and perceived savings. If the anchor is false, consumers experience a material misrepresentation—they may buy or pay more than they otherwise would have.
2) When reference pricing crosses the line
- Non-existent former price: “Was $129” when the item was never actually sold at $129 (or only for a token period meant to manufacture a “sale”).
- Stale former price: using a prior price that did not prevail recently (e.g., years ago or for only minutes), while implying recency.
- Inflated MSRP: quoting a manufacturer “list” price that no one charges, or that the manufacturer does not actually recommend for that SKU/region.
- Compare-at without a basis: benchmarking against a different model/quality or non-comparable sellers; cherry-picking the highest market price.
- Bundle vs. unit mismatch: comparing a discounted bundle to the sum of full list prices when the market commonly bundles at a lower effective rate.
3) Legal hooks (plain-English overview)
- United States
- FTC Act §5 (unfair or deceptive acts), plus the FTC’s Guides Against Deceptive Pricing (16 C.F.R. Part 233) addressing former price, list price, and “compare” claims.
- State UDAP/UDTPA laws (e.g., California, New York, Massachusetts) enable AG actions and private suits. California’s Bus. & Prof. Code §17501 restricts former-price advertising unless the former price was the prevailing market price within the prior 3 months (or the ad discloses the date when the former price prevailed).
- Lanham Act §43(a) allows competitors to sue for false advertising where reference pricing deceives consumers and harms competition.
- European Union
- The Unfair Commercial Practices Directive (UCPD) prohibits misleading actions/omissions; the Omnibus Directive adds rules on price reduction announcements (many Member States require that a “price reduction” be measured against the lowest price in the previous 30 days).
- United Kingdom
- The Consumer Protection from Unfair Trading Regulations 2008 (CPRs) and the CMA’s pricing practices guidance emphasize truthful former-price claims; CAP Code rulings frequently sanction inflated “WAS/NOW” savings.
4) Proving deception: the evidence pack you actually need
Regulators and courts care about what the shopper saw and whether the reference had a truthful, timely basis. Build a pack that answers both.
Evidence checklist
- UI captures: screenshots or session video of the listing, PDP, cart, and checkout showing the strikethrough or “compare at.”
- Time-stamped price history for the specific SKU/GTIN (yours and major rivals) over the preceding 90–180 days; include region, channel, and promotions.
- Receipt/confirmation and any email/SMS ads that echoed the claim.
- SKU normalization: prove you compared like-with-like (model, size, finish, warranty, refurb vs. new, delivery terms).
- Market scan methodology if the claim referenced “other retailers”: data sources, sampling window, and how outliers were handled.
- MSRP substantiation: the manufacturer bulletin or public page showing the list price, with effective dates and SKU match.
- Geography & channel: show the claim in the jurisdiction where the consumer saw it (geo-IP, store ID, in-store signage photo).
5) Quantifying the deception
Present simple math that contrasts the claim with reality.
Claim shown: "Compare at $199 — You pay $129 (Save 35%)" Observed facts (last 60 days, same SKU, same region): - Seller's own highest price: $149 (for 3 days) - Median market price across 8 retailers: $139 - Any retailer at $199? No Inference: - Reference $199 lacks basis; true savings vs. prevailing market ≈ $10 (7%), not 35%.
6) Visuals — how “compare at” shifts perceived value
Price (USD) | Anchor shown → 199 169 149 139 (prevailing) Perceived $ off at $129 70 40 20 10 Perceived saving % 35% 24% 13% 7% Reality vs prevailing 7%
7) Consumer playbook — step-by-step
- Record the claim (screenshots/video), the URL, and the date/time. If in-store, photograph the sign and shelf tag.
- Cross-check the item across major retailers and the seller’s own history (price trackers, saved caches, public pages).
- Write to the merchant: state that the reference price appears unfounded; attach your evidence; ask for a price adjustment or refund.
- Escalate to the marketplace/platform if applicable; many have rules prohibiting inflated “compare at.”
- Regulatory complaint (US: FTC + State AG; EU/UK: national consumer authority/CMA) if unresolved.
- Payment dispute (misrepresentation) if you relied on the false saving to buy.
Template — short demand
Dear [Merchant], on [date] your page for [SKU/Link] advertised “Compare at $[X]—now $[Y]”. Our review of your price history and the market shows no seller offering $[X] during the last [30/60/90] days. Under consumer-protection rules and your platform policy, this appears deceptive. Please refund the difference ($[Δ]) or cancel and refund in full. Evidence attached. Sincerely, [Name/Order #].
8) Compliance architecture — how to do reference pricing right
- Claims registry: every “Was/List/Compare” string must have an owner, data source, lookback window, and jurisdictional rule.
- Lookback windows:
- Former price (US best practice): item was offered at that price for a meaningful period recently; in CA, disclose the date or ensure it was the prevailing price within 3 months.
- EU price reductions: measure savings against the lowest price in the last 30 days (subject to national implementation and exceptions).
- MSRP discipline: ingest list prices only from manufacturer-of-record feeds; auto-expire stale MSRP; show “MSRP” label (not “Was”).
- Compare-at methodology: define comparison set (same GTIN/SKU, region, new condition); compute median of active competitor prices; refresh daily; exclude fleeting outliers.
- Geography & channel: apply rules per country and channel (website, app, in-store); do not reuse a US claim in the EU without re-basing.
- Automated tests: block pages when the data source is missing, stale, or out of window; show the current price only.
- Receipts mirror the claim: if a savings % is shown, store the exact inputs used to compute it (for audits and disputes).
9) “Red flag” patterns to eliminate
- Perpetual “Was $X” label that simply flips every few days to keep a sale running.
- Using MSRP as if it were a former selling price.
- Compare-at based on non-comparable variants (different capacity, grade, warranty).
- Strikethrough on marketplace offers where the seller never sold at the higher price.
10) Quick Guide
- Say it only if you can prove it with dated records for the same SKU and market.
- Former price = your own prior price, recent and meaningful; MSRP ≠ former price.
- In the EU, price reductions should reference the lowest price in the last 30 days (with limited exceptions).
- “Compare at” needs a documented competitor set and method (median is safer than “highest”).
- Store the calculation inputs that create the savings number shown to consumers.
- Kill endless sales; timebox promotions; rotate without implying a fake prior price.
11) FAQ
1) Can we use “Compare at” if one boutique lists the item at that price?
High risk. A single outlier rarely represents the prevailing market price. Use a representative set and a median/typical price.
2) Our MSRP is higher than any market price—can we still show it?
You may show MSRP with that label if it’s genuine and current, but avoid implying savings vs. MSRP when the market has moved permanently lower.
3) How long must we have sold at the former price?
No universal number, but “meaningful” duration matters. Some US states (e.g., California) require that the former price be the prevailing price within the last 90 days or that you disclose the date when it prevailed.
4) Do marketplace sellers have different obligations?
Duties are similar. Platforms also impose policies; sellers can face delisting for inflated “compare at” claims even absent a regulator.
5) Can we use a competitor’s promotional price as the reference?
Not for inflating savings. Reference should reflect everyday market pricing, not a fleeting, atypical promo.
6) Is it okay to round the saving up?
Only if the rounding is conservative and does not overstate. Better: display the exact amount or round down.
7) What about outlet/clearance formats?
Still risky to use exaggerated “compare at.” Many enforcement actions have targeted outlets that used fictitious former prices.
8) Are disclaimers enough to cure a weak reference?
No. A footnote cannot fix a false anchor. Disclaimers help explain methodology but do not legitimize an untrue claim.
9) We sell globally—can we reuse the same reference price?
Do not. Re-base by country/region; exchange rates, VAT, and market norms differ. EU “30-day lowest” rules complicate cross-posting.
10) What if the manufacturer increases MSRP mid-campaign?
Update your feeds promptly. If your claim implied savings vs. the old MSRP, re-evaluate the math or remove the saving until you validate the new basis.
12) ASCII table — compliant vs. non-compliant examples
Scenario Status Why ----------------------------------------- ----------- ----------------------------------------------- "Was $129, now $89" (sold at $129 for 21d) Safer Recent former price; duration meaningful "Was $129, now $89" (never at $129) Illegal False former price "Compare at $199" (median rivals $139) Illegal No basis; inflated anchor "MSRP $199; our price $129" (real MSRP) Contextual Truthful if MSRP is genuine and current "Save 30% vs lowest price in last 30 days" EU-aligned If data shows the 30-day lowest was $184.29
13) Technical base (legal sources – English)
- FTC, Guides Against Deceptive Pricing, 16 C.F.R. Part 233 (former price, list/MSRP, and comparative price advertising).
- U.S. State UDAP/UDTPA statutes; e.g., California Bus. & Prof. Code §17501 (former price advertising); Massachusetts 940 CMR 6.05 (pricing claims).
- Lanham Act §43(a) (false advertising) for competitor suits.
- EU Unfair Commercial Practices Directive (2005/29/EC) and national implementations of the Omnibus Directive for price reduction announcements (30-day rule models).
- UK Consumer Protection from Unfair Trading Regulations 2008; CMA pricing practices guidance; CAP Code decisions on savings claims.
Important notice: This educational content does not replace a lawyer. Rules vary by jurisdiction and change over time. For live promotions or investigations, consult qualified counsel.