Make a Marketing Plan 131
Commenting on Your Competitor’s Price If you advertise that you are selling a product at a price lower than your competitors, be sure that the price you advertise is what a consumer would consider a genuine bargain or saving. For example, if several of your competitors regularly sell variety F flower bulbs at $20.00 a dozen, it is honest for you to advertise: “Variety F flower bulbs—priced elsewhere $20.00; our price $16.99.”
Keeping Prices Fair The laws that govern pricing do not allow you to deceive or mislead people. Your prices must be real. You cannot advertise one price and then sell for a higher one. For example, if one of your products or services usually sells for $19.95, it is illegal to say that it usually sells for $29.95, but now you are willing to sell it for the bargain price of $19.95.
Alert! Bait and Switch: Do not pull a bait and switch. You cannot advertise an item for one price and then try to sell a substitute item of lesser quality at the same or higher price.
Buy one get one free is a favorite inducement. In addition, it is legal. However, do not increase the price of an item or service, and then offer a second for free. Do not make the second one of lesser quality. This once “acceptable business practice” is now illegal.
Penalties for Deceptive Pricing Practices There are some serious penalties for engaging in deceptive pricing practices. Your state and the federal government can levy fines against you. Both of them can order you to cease and desist your practice and fine you if you do not comply. Consumers can sue you for the damages they incur because of your practices. One of the worst penalties can be the resulting bad publicity for you and your business if you are fined or sued for this kind of practice.