Retailers may struggle with price tag and sales tactics guidelines

Retailers say proposed seven-day discount requirement will be tricky while 'aggressive' tactics ban raises eyebrows in the beauty trade

PUBLISHED : Monday, 04 February, 2013, 12:00am
UPDATED : Monday, 04 February, 2013, 8:21am

Retailers may find it tough to follow some of the government guidelines on price tags and sales tactics aimed at protecting consumers, some traders say.

The government passed an amendment to the Trade Descriptions Ordinance last year in a bid to stop unscrupulous and misleading sales practices. Now, the Customs and Excise Department is holding a public consultation on its draft guidelines to enforce that law.

One of the guidelines states that an "original price" should only be quoted if it has been applied to the same goods or services for at least a week before it is discounted, in a bid to stop merchants from faking bargains.

But retailers say the requirement would be a problem for some, especially those who sell fresh produce.

"Sashimi could cost HK$100 in the morning and HK$60 in the afternoon. It can't last seven days," said Caroline Mak Sui-king, chairwoman of the Retail Management Association.

She added that shops frequently cut prices to keep up with their competitors, and it would be unfair for them if those discounts could not be shown on price tags.

"For supermarkets, a chain may cut prices two hours after its competitor brings in a discount. [Under the guidelines] they would not be able to tell customers about the changes," she said.

The guidelines also say traders should ensure that goods are actually made in the place where the label says they are manufactured. Yangcheng Lake hairy crabs are given as an example by customs, which stipulates that only Chinese mitten crabs harvested in the Jiangsu province lake should be given the name.

But Mak said there was ambiguity about how retailers should deal with certain items and their origin. "Fuji apples are not necessarily harvested in Japan," she said, adding the apple variety was also grown in other countries.

A trade group from the beauty industry, which would also be affected by the amendment, wanted clarification of the "aggressive" sales practices that would be banned.

Customs defines harassment as physical or psychological pressure that impairs a customer's freedom of choice.

"What about saying a customer is ugly? Would that put unreasonable pressure on her?" asked Nelson Ip Sai-hung, founding chairman of the Federation of Beauty Industry.

Ip, who also works in publishing, said certain words such as "bringing back youth" are banned from appearing in advertising under the Undesirable Medical Advertisements Ordinance. He said he sometimes checked with the Department of Health, which enforces that ordinance, when he has doubts over the use of words.

He suggested customs set up a similar hotline to answer traders' enquiries, but said the government was not enthusiastic about the idea. "People ask questions because they don't want to break the law," he said.

In response to retailers' concern about the seven-day price tag guideline, the Consumer Council said a test should be applied by customs when evaluating whether a reduction was genuine. This test should take into account the nature of the product, such as whether or not it is perishable. The seven-day period was merely a suggestion for best practice, the council added, saying it was not a fixed rule to be strictly followed.

The public consultation on the draft guidelines will end on March 17.