Hong Kong retailers scramble to comply with tougher law on price tags

Fake discounts and other sharp practices made illegal from tomorrow, but business owners say newly tightened legislation is highly ambiguous

PUBLISHED : Thursday, 18 July, 2013, 12:00am
UPDATED : Thursday, 18 July, 2013, 7:17am

The city's retailers are busy changing price tags in their stores in order to comply with new consumer protection regulations that come into effect tomorrow.

Amendments to the Trade Descriptions Ordinance have expanded its coverage from goods to services, banning misleading sales practices such as faking discounts and concealing extra charges.

Retailers must use price-related terms such as "sale", "original price" and "reduced price" accurately and judiciously to avoid misleading consumers, according to guidelines from the Customs and Excise department, which will enforce the new rules.

In response to the new requirements, snack chain 759 Store yesterday started to replace some "discounted" price tags.

In the past, the shop ran a membership scheme offering members a 10 per cent discount on regular-priced goods but not "discounted" goods. Those "discounted" goods were not actually sold at a lower price; the tag merely indicated that the membership discount did not apply.

"Some customers may have wondered if there was a higher 'original price'," said 759 Store owner Coils Lam Wai-chun. "In fact, our intention was to tell members the goods would not be further discounted."

To clear up any misunderstanding, 759 has come up with two new measures: it has raised the prices of some of those goods and removed their "discounted" tag; for other goods, the "discounted" tag has been replaced with one that reads "official fixed price", meaning no discount.

All staff members are now banned from writing price tags by hand and must print them according to price information stored in computers, Lam said.

The chain is also adding details to the tags. On top of listing where its packaged products are imported from, it will add the contents' countries of origin.

Department store Yata has set new guidelines for its staff and tenants, requiring them to state an "original price" on price tags only if it has been applied for a period of time. The time period varies among different types of goods; household goods should have been sold at the same price for at least a week, for instance. The guidelines were given to tenants on Tuesday, chief executive Daniel Chong Wai-chung said, adding that customs' own guidelines remained ambiguous.

Customs guidelines say a price should not be regarded as the "original price" if it has been applied to a product for an unreasonably short period.

But Chong asked: "How short is an unreasonably short period? Is it one minute or 10 months? Customs cannot answer our questions in full. Lawyers have also told us determinations can be made only on a case-by-case basis in court."

Booksellers at the Hong Kong Book Fair are also worried about potential breaches.

James Yen, of Taiwanese exhibitor Jen Jen Publishing, said the Trade Development Council, which runs the fair, had told him about the law only a week ago, after he had shipped his books.

"We respect local laws, but we weren't given enough information about them," he said.

Page One senior marketing executive Keith Wong Yiu-wing said he hoped customs would consider supply issues.

"Sometimes discounted goods run out really fast and we can't replenish until nighttime," Wong said. "It's not as though we are using discounts as bait to attract customers without supplying the goods."