Colourful price tags at Australian chemists may trick shoppers into buying full-price items, Choice says
Promotional price tags used by major chemists may be enticing shoppers towards products that are not discounted at all, with new research finding bright labels are confusing one in three customers.
Consumer advocacy organisation Choice found that some pharmacies said they were offering discounts from the recommended retail price (RRP) despite having never charged the higher rate, which is a suggestion from the manufacturer.
Other products had colourful supersized tags that obscured smaller shelf labels offering the same prices, meaning some customers thought they were getting discounts that did not exist, Choice's senior campaigns and policy adviser, Bea Sherwood, said.
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'Walking down the aisles, you're bombarded by yellow and pink sales tags,' Sherwood said.
'Discounts should be clear and transparent, not confusing.'
Choice found around one in three people – from a survey of 1,000 customers – found it difficult to tell if price tags at Chemist Warehouse, Priceline and Terry White offered discounts.
Jana Bowden, a marketing professor at Macquarie University, said the issue was not limited to major chains, pointing to her recent discovery that a local chemist was charging her elderly neighbour double the price a big competitor would have.
'Many pharmacies prey on consumer complacency,' Bowden said. 'Bright sales tags, stickers, and promotional flags trick consumers into thinking there's a sale to be had.'
Clare Mullen, executive director at Western Australia's Health Consumers' Council, said the alleged practice could be particularly concerning where consumers were seeking medical products to treat health issues.
'Going into some of these places is a visual assault,' Mullen said.
'When we're talking about health-related items, it's just unfair that the onus is on the consumer to put in the extra effort.'
One Terry White store analysed in the research sold a tube of toothpaste discounted to $6 from a recommended $11.99, despite the typical price being only $8.99, Choice said. Seven in 10 survey respondents believed they were getting a $5.99 saving on the product's usual price – double the actual saving.
Priceline labels included phrases such as 'great value' and 'lower prices' next to some products' existing sale prices without directly claiming a discount.
Australia's consumer watchdog has said businesses must not mislead customers, including by offering a displayed price against a recommended retail price the product had never been sold at.
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The Australian Competition and Consumer Commission (ACCC) also identifies the promoting of an item's normal price as a sale or special as misleading behaviour.
Supermarket chains have previously faced pressure over discount labels, with Choice finding widespread confusion among customers over whether price labels represented real value, with the phrases 'while stocks last' and 'prices dropped' flagged as the most confusing.
In a separate case, the ACCC is suing Coles and Woolworths over allegations they misled shoppers by offering 'illusory' discounts on hundreds of common supermarket products.
Sherwood said Choice began the research into pharmacy prices after customer feedback that sale confusion made shopping at chemist chains difficult.
The survey asked respondents to judge whether they were getting a discount and whether they found it easy to identify the discount or lack thereof, using an unsystematic selection of shelf stickers at major chains in November 2024.
The bright and bold sticker-pricing practice has long been a feature of Australia's chemist chains.
Guardian Australia sought comment from Chemist Warehouse, Terry White and Priceline.
Priceline told Choice some of its labels were not intended to represent a discount. Terry White told Choice its recommended price labels were quoted from each product's supplier and did not reference a previous retail price. Chemist Warehouse's website indicated recommended prices matched supplier quotes on the condition at least 5% of all sales used a similar price.
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