On 12 November, the Australian Parliament passed the Trade
Practices Amendment (Clarity in Pricing) Bill 2008. This will
affect the use of component pricing in advertising, such as
"$20 a month for 12 months" or "$1,000 plus delivery
Once the Bill receives Royal Assent, advertisers may continue to
use component pricing, but only if they also include in their
advertisements (and other promotions) the Single Price for the
That Single Price is the total amount a customer would pay to
the seller to obtain the product.
The Single Price must include the price for all components that
are quantifiable. A component price is quantifiable if it can be
If there are some components the price for which can not be
quantified, the Single Price need not include that component, but
the advertisement must make it clear that the customer will have to
pay the Single Price and the cost of this component (otherwise the
advertisement would be misleading and deceptive).
A component is not unquantifiable if it simply varies from
place to place or transaction to transaction. In these cases, the
advertiser must include in the Single Price the minimum cost of
that component and promote the Single Price using language such as
The Single Price does not need to include – and
should not include – the price of any optional product
features or additional goods or services the consumer may choose,
but must include all amounts a costumer must pay in order
to obtain the goods or services. For example, if customer must pay
by credit card, the compulsory surcharge must be included in the
Where the customer must pay delivery, delivery charges may be
included in the Single Price, but need not be. If they are not
included in the Single Price, the delivery charge must be featured
in the advertisement separately.
If the cost of delivery varies, the advertiser must feature the
minimum amount payable for delivery. To avoid being misleading and
deceptive though, the advertisement must clearly state that this is
the minimum, stating something like "delivery from $35 in
Stating the minimum delivery charge or the minimum price of the
product (where the Single Price includes the cost of components
that cannot be quantified) does not prevent the seller negotiating
a lower price with the customer. Negotiating a lower price will not
breach the TPA.
The Single Price must be featured as prominently as any
component is featured in the advertisement or promotion.
These changes do not apply to purely business to business
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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