As the exponential growth of e-commerce has revolutionized consumer behavior, Black Friday sales have become a global phenomenon, where consumers are almost “influenced” by high discount rates. The increase in online shopping during such events has significantly shaped consumer habits, underscoring the crucial importance of enacting legislation to protect consumer rights and interests.
In Turkey, the Consumer Protection Law No. 6502 (“Law No. 6502”) aims to take measures to protect the health, safety, and economic interests of consumers in accordance with the public interest to enlighten and raise awareness of consumers. Discounted sales advertisements are also outlined with specific rules under the Regulation on Commercial Advertisement and Unfair Commercial Practices (“Regulation”). Moreover, the Ministry of Trade, as the authorized governmental institution, prepared the Guide on Advertising with Price Information, Discounted Sales Advertisements and Commercial Practices (“Guide”) to further regulate the principles regarding discounted sales. In this context, the Regulation and Guide include the following basic principles regarding the protection of consumers during discounted sales practices:
Fundamental Principles on Discounted Sales
Although the Regulation does not define discounted sales, while regulating the fundamental principles governing them, the Guide provides a definition for discounted sales as “sales of a good or service with a sign indicating that the sale price of a good or service has been reduced due to seasonal changes, decrease of goods stocks, opening, closing, transfer, liquidation, change of workplace address or subject of activity and similar reasons”. Accordingly, the Regulation and the Guide set forth the following principles in relation to the protection of consumers:
Discounted sales advertisements must provide explicit information to consumers on (i) the duration of the discount and (ii) if the quantity of a good or service is limited, the stock capacity for such good or service.
Discounted sales advertisements must not possess statements or images that (i) mislead or deceive consumers about the goods or services subject to discount and the discount rate and (ii) create a false impression about the discount rate.
In determining the sales price of a good or service prior to the discount, the lowest price applied within the 30 days before the discount must be taken into account.
According to the Guide the following are not within the scope of discounted sales:
Conditional sales such as ‘Buy 3, Get 1 Free’, ‘TRY 50 discount over TRY 500’, ‘20% discount on the second product, ‘Buy 3, 30% discount in the basket’,
Advertisements comparing discounted sales prices, such as ‘best/lowest price’,
Discount cards, coupons, loyalty programs that give consumers the right to long-term discounts on specified groups of goods or services, or applications that allow consumers to accumulate points for future purchases,
Dynamic or real-time pricing methods,
Personalized price reductions that do not constitute an advertisement for a price reduction.
Another issue that is considered to mislead consumers is “insufficient stock” practices. Especially if demand increases during discount periods and the discount is limited to stocks, consumers may encounter practices such as order cancellation. Offering a product that does not have sufficient stock for sale without stating this and selling more than the stock is considered unfair commercial practice as it misleads consumers. The Advertising Board actively evaluates practices regarding order cancellation due to insufficient stock and imposes sanctions on companies that are deemed to engage in unfair commercial practices. For example, in a published Advertising Board decision, the seller published an advertisement inviting consumers to purchase at a discounted sales price, without stating that stocks were limited in the advertisements. Later, due to "lack of stock", the relevant seller canceled the orders of some consumers and/or informed the consumers that they had to cancel their orders. In this decision dated 09.03.2021 and numbered 2020/4384, placing the products on sale without stating that the discount is limited to stocks and canceling the sales of consumers based on insufficient stock was considered as unfair commercial practice and it was decided to impose an administrative fine on the seller.
Specified Rules on Discounted Sales
Determination of the Previous Price
The most important issue in organizing discounted sales is which amount will be used as the pre-discount price. According to the Guide, the lowest price applied in the 30 days prior to the date of the discount is taken as the basis for determining the selling price of a good or service before the discount. In this context, in order to prevent consumers from being misled by discount advertisements or price tags, discount advertisements or price tags must indicate the lowest price applied within 30 days prior to the date of the discount as "crossed out" or "previous price". On the other hand, some examples of practices that mislead consumers during discount periods are as follows:
On price labels or in advertisements, the non-discounted price is shown as the recommended selling price, not the lowest price in the last 30 days. Consumers who do not know the actual selling price of the product may perceive the discounted price as higher.
Sometimes companies may apply multiple discounts in the same month. As has been the subject of decisions of the Advertising Board, some companies do not take into account the intermediate discounts and present them as a discount directly on the non-discounted price. In this case, the consumer is misled into believing that the discount is much higher than the actual discount rate.
With the developing e-commerce market, sellers and providers can offer goods or services to consumers through different sales channels. In pricing offered through different channels, the consumer must be protected and prevented from being misled. Regarding discounted sales, the above-mentioned rules will be evaluated separately for each sales channel. For example, the same product may be sold by the same seller in different sales channels at different prices. However, the discount rate will be determined separately for the price in each sales channel and the pre-discount amounts in different sales channels will be considered independent from each other.
Additionally, the Guidelines prohibit advertisements stating that the discounted sale is valid in all sales channels, when in fact, discounted sales are only available in certain sales channels. Furthermore, if a good is offered for sale on the same e-commerce platform and by the same seller with different extensions, with different discount rates and amounts, such practices are considered contrary to the legislation as they will cause confusion among the average consumer regarding the discount applied to the product.
Phrases in the Discounted Sales Advertisements
The Guide allows advertisements to use phrases that give the impression of discounted sales, such as ‘fantastic/amazing November/Friday offers’, ‘giant deals’, ‘20% discount on all products today’ or ‘TRY 10 discount on all products today’. Moreover, such advertisements do not have to demonstrate the price of each product prior to the discount. However, the advertisements of each of the relevant goods and services must include the lowest price applied within the 30 days prior to the discount or the previous price.
Moreover, in advertisements related to a seller or provider offering a general price reduction through varied discounts on different categories of goods or services, clear statements must be made about the categories and their corresponding reduced prices. The items or services featured in the advertising campaign must be easily distinguishable to consumers in a clear and understandable way using phrases such as ‘winter season products’, ‘x branded products’, ‘second product’ or similar expressions. There should be no confusion or ambiguity about the advertised goods and services and their discounted prices.
Additionally, the phrases such as ‘up to’, ‘from’, ‘until’ included in the advertisements regarding discounted sales campaigns must be in a readable size. Such phrases and the scope of the goods announced to be subject to discounted sales should meet the reasonable expectations of the consumer. Moreover, phrases such as ‘net’, ‘all’ or ‘everything’ must not be used unless the discount is applied to all goods or services in the store or in a particular category.
Advertisements Targeting Disadvantaged Groups
Pursuant to the Guide and the Regulation, additional care must be exercised in discount sale advertisements and commercial practices targeting vulnerable consumer groups, including but not limited to, the elderly, individuals with disabilities, and children. In this regard, the Guide foresees that in discount sale advertisements targeting children, it is important to avoid using expressions such as ‘only’ or ‘just’ next to price information to create the perception of low prices. Additionally, in line with the principles of advertising legislation, children should not be directly urged to persuade their parents or others to purchase a good or service.
Authors: Hatice Ekici Tağa, Sümeyye Uçar, Begüm Alara Şahinkaya, Ebru Gümüş Karasu