Anyone who occasionally offers discounts in their online store or sells goods that fall under the basic price obligation should now pay very close attention. This is because the new Price Indication Ordinance (PAngV for short) has been in force since May 28, 2022. This provides for very strict rules for retailers in discount promotions and a change in the basic price.
In this article, we will tell you exactly which changes are involved. You'll also learn how you can actually comply with them as a Shopify merchant.
Are you using Shopify or Shopify Plus and could use professional support? Then feel free to contact us and we will be at your side with advice and support.
Table of contents
Price quotation regulation definition
The Price Indication Regulation is a consumer protection regulation and ensures that prices are true and clear. This means that prices must be clearly recognizable, easy to read and clearly assigned to products. In addition, the PAngV stipulates that prices must be displayed to end consumers with all components, such as sales tax.
Changes in advertising with price reductions (Section 11 of the PAngV)
New Price Indication Ordinance: What does §11 say?
The fact that consumers are often sensitive to offers should not be new to you. After all, you see this not only in your customers, but probably in yourself as well. And it is precisely this behavior that suppliers have often exploited in the past to lure potential buyers with supposed discounts. In doing so, they have, for example, increased their prices in the meantime in order to be able to offer "greater" discounts as a result.
In order to prevent precisely this misleading practice, a new version of the Price Indication Regulation came into force on May 28, 2022. Dealers in the European Economic Area (EEA) and dealers who sell to consumers in the EEA and offer discounts have since been required to indicate the lowest price the product cost at least 30 days before the discount promotion.
The law aims to make prices more transparent and ensure that consumers actually pay less when a discount is advertised.
Reading tip: In this article we show you 11 ways how to increase your average order value (AOV) with Shopify Plus.
§ 11 Price Indication Ordinance: What traders must now disclose
Since the new Price Indication Regulation came into effect, merchants selling to consumers in the EEA who indicate a discount must disclose the lowest price the discounted item cost a month or more ago.
Example of the 2022 updated Consumer Protection Regulation Section 11 PAngV.
Let's say Black Friday was around the corner and all the major vendors were offering enticing deals. In our example, you are an online retailer who would like to participate in this promotion day. In order to keep up with the competition, you temporarily increase the price of your products from €30 to €45 two weeks beforehand.
Your ulterior motive: This way, you can advertise with significantly higher discounts on the deadline and write, for example, "Reduced from €45 to €25". Your customers will then assume that they are saving a whole 20 €, when in fact they are only paying 5 € less. So in this case, they would have artificially raised prices just before Black Friday, only to then give the appearance of a higher discount.
Such a deceptive approach is no longer possible since May 28, 2022, because since then you have to indicate the lowest price of the last 30 days as the "From" price. So even if you were to increase the price to €45 two weeks in advance, you would still have to advertise with this on Black Friday: "Reduced from €30 to €25".
Reading tip: Learn how to prepare for promotion days as a retailer in this blog.
Where must the lowest previously offered price be indicated?
If merchants offer a discount that affects the entire online store (e.g. through a banner on the homepage), then the lowest price of the last 30 days must still be indicated on each individual product page. In the case of discounts on individual items, the price should also be indicated on the product page. In addition, the app, checkout, email communication and, if applicable, other sales channels should not be forgotten.
Reading tip: Speaking of product page - Do you already know these 12 Subpages that every e-commerce website needs?
So basically, wherever discounts due to promotions are mentioned, the lowest price from at least a month ago must be quoted before the discount is announced.
Tip: If frequent discounts are an important feature of your sales strategy, it's best to set up a procedure to track previously offered prices. This is also useful because it allows you to have proof of the lowest price offered from 30+ days ago in the event of an enforcement action by a regulatory agency or a consumer lawsuit. For example, we at Latori will soon be offering you an excellent tool for this: our app for regulating price information.
Latori app for regulating price quotes
With our pricing regulation app, all Shopify and Shopify Plus merchants will soon be able to monitor the prices of their products in the store, record all changes locally, view the lowest comparison price in the last 30 days, and much more. The app is legally compliant and updated daily.
What our app does for you:
it calculates the lowest price of your products within the last 30+ days
it records the history of all price changes of your products
it calculates the comparison price of product types in your Shopify store
it determines the lowest price charged for a product
it enables you to correctly implement the new EU directive on price indication
Main advantages of the new Latori-App:
Price transparency: Enable your consumers to evaluate and compare product prices based on consistent and transparent information.
Accuracy: Our price regulation app provides accurate results by always recording the lowest total price for a product after 30 or more days.
Time savings in manual data entry: Reduce the need for manual data entry, thereby reducing errors.
Price quotation regulation example: This Latori customer uses the app
Asphaltgold
The well-known sneaker and streetwear retailer has been using the Latori Best Price Indicator since September 2022 to show customers the 30-day best price.
The 5-star review confirms that the Latori app immensely improves compliance with the Price Disclosure Regulation.
"Great app to manage sale prices while staying legally compliant (EU Price Indication Regulation). Support is 10/10 as always - thanks Latori :)" - Asphalt Gold
Price Indication Ordinance: Which advertising measures does it apply to?
The new rules apply both when a merchant discounts only one product and when the promotion affects all items in the store. Specifically, this includes discounts in the form of:
| of a percentage | z. e.g. "20% discount" or "10 Euro discount". |
|---|---|
| of a new lower price that refers to a previous higher price | z. e.g. "now only 50€, before 100€" or "50€/100€". |
| of a current lower price, which will increase in the future | z. e.g. "still 20€, soon 25€". |
| an advertising campaign that makes it appear that the discount corresponds to the value of the tax | z. e.g. "Do not pay VAT today". |
| certain wording intended to create the impression of a discount without indicating a measurable price decrease | z. e.g. "Special Price" or "Black Friday Deal |
Exceptions to this are, for example, products weighing less than 10 g or mixed goods, like a gift basket. There are also cases in which the new Price Indication Ordinance does not apply.
Reading tip: In this article, we'll explain everything about loyalty points in online stores and why they could become your best marketing tool.
When these changes to the PAngV do not apply
Apart from national exceptions, the European Directive on Price Indications does not apply to price reductions that arise independently of an advertising measure, e.g. in the case of:
| General marketing statements about price comparisons or benefits that are not explicitly aimed at lowering prices | z. e.g. "best price" or "lowest price |
|---|---|
| Price fluctuations for reasons other than advertising | z. e. g. increased or decreased costs |
| Personalized discounts | z. e.g. through personal discount codes or loyalty programs |
| Price comparisons | z. e.g. EIA or the offer of the competitor's border |
| Combined or conditional offers | z. e.g. "Buy one, get the second free" or "Buy three, get 30% off"). |
| Third-party "cashback" announcements | If, for example, they do not sell products but promise consumers a partial refund of the price paid |
National rules and exceptions to Section 11 of the PAngV.
In addition to cases where the Price Indication Regulation does not apply, there are also differences in individual member states that Shopify merchants need to be aware of. Because even if your company is based in Germany, national differences can still affect you. In fact, this is exactly the case if you sell to consumers from other EU countries. Therefore, it is important that you check the national interpretation of the PAngV for each EEA country in which you do business. Different rules may apply, for example, if: prices are gradually reduced
the product has only been on the market for less than 30 days
the product spoils quickly or has a limited life span
In addition, other countries may have mandated a longer period than the 30 days for determining the lowest price.
Reading tip: Do you already know these 6 Shopify hacks?
How to comply with the new regulations in your Shopify store.
So now you know what to look out for following the changes to the Price Indication Regulation. Now it's time to align your Shopify store with them. In the following, we'll show you how you should proceed step by step to do so:
Go to your Shopify administration.
Click on "Products" and select the product you want to discount.
At "Pricing", set the lowest price from at least 30 days ago.
Set the new discounted sale price in "Price".
You also have another option to comply with the new regulations. For this, you need to add meta fields to your product pages. This will allow you to display other price information in addition to the lowest previous price. You can find out exactly how this works in the Shopify- Helpcenter or you contact us.
Price Indication Regulation § 11: What happens in case of non-compliance?
When deciding on the amount of the penalty for non-compliance with the new Price Indication Regulation, the individual member states have a great deal of discretion. The only rule is that the penalty must be "effective, proportionate and dissuasive".
Changes in the basic price (§ 5 of the PAngV)
Reading tip: In this article, we explain which things to consider when taking the step towards internationalization and how international sales can be implemented with Shopify.
The regulations amending the Price Indication and Prepackaging Ordinance have been in force since September 1, 2000. Since then, many products must be labeled with an additional price indication, the so-called basic price. However, there is also a very important and practically relevant change in the Price Indication Ordinance with regard to this indication of the basic price.
Since May 28, 2022, products whose nominal weight or volume does not normally exceed 250 grams / 250 milliliters must also uniformly indicate 1 kilogram or 1 liter as the basic price unit. Previously, the basic price could still be indicated here with reference to the units 100 grams or 100 milliliters.
To put it in a nutshell: no retailer should now indicate its basic prices with reference to the units 100 grams / 100 milliliters, but always with reference to 1 kilogram / 1 liter (or 1 meter, 1 square meter or 1 cubic meter). This change is also intended to improve price transparency.
Which goods are affected by the change of the basic price indication?
If the following items are offered by weight, volume, length or area, the basic price must be indicated in addition to the final price:
Products in finished packages
Products in open packages
Products sold as unpacked sales units.
Products that are bottled by the customer, such as vinegar or oil, are exempt from this requirement
Reading tip: Learn why Shopify is the perfect tool for direct-to-consumer strategy
How should the basic price be displayed?
The basic price must be displayed in such a way that it is "unambiguous, clearly recognizable and easily legible" for the consumer. Therefore, the total and basic price must be visible at a glance. For online retailers in particular, it is important to note that this requirement is not met if a separate link must first be clicked or a mouse-over is required to display the basic price.
How to comply with the new regulations on base pricing in your Shopify store
To correctly specify the base price in your Shopify store, go to the "Pricing" tab, set the unit of measurement (volume, weight, size, or area) there, and define the total size and base unit for base pricing. Based on this, the base price will then be calculated automatically.
Price Indication Ordinance § 5: What happens in the event of violations
A violation of the Price Indication Ordinance can be punished as an administrative offense. In addition, violations can also be prosecuted under Section 1 of the German Unfair Competition Act (UWG) as part of a cease-and-desist claim by competition associations and competitors.
Reading tip: What is actually the difference between Shopify and Shopify Plus? We answer these questions and more in our Shopify and Shopify Plus FAQ blog.
Conclusion
With the changes to the Price Indication Regulation on May 28, 2022, there are two important changes for retailers. First, if you sell to consumers in the EEA and want to offer a discount, you must also indicate the price on the discounted product that it cost at least 30 days before. Secondly, for products that are offered by weight, volume, length or area, you must always indicate the unit 1kg / 1l / 1m / 1m2 / 1m3 as the base price. With this two measures the goal of a higher price transparency is pursued.
To be on the safe side in your Shopify store, you should consult the step-by-step instructions in the article or, if in doubt, consult one of our experts. Contact us
Frequently asked questions about the Price Indication Ordinance
What is the Price Indication Ordinance?
The Price Indication Ordinance (Preisangabenverordnung) is a German consumer protection regulation that ensures clarity and transparency in price indications. Prices must be true, clearly legible and clearly attributable to products.
To which goods does the Price Indication Ordinance apply?
The Price Indication Ordinance (PAngV) is important in e-commerce because it applies to all goods and services in the B2C sector. It therefore only affects end consumers and not business customers in the B2B sector.
Since when does the Price Indication Ordinance apply?
The new Price Indication Ordinance (PAngV) came into force on May 28, 2022.
Who monitors the Price Indication Ordinance?
The regulatory office is responsible for compliance with the Price Indication Ordinance and penalizes violations.
What does 30-day low price mean?
According to Section 11 (1) PAngV n.F., traders in the European Economic Area (EEA) who sell to end consumers and offer discounts must indicate the lowest price that the product cost at least 30 days before the discount promotion.
Why is there a Price Indication Regulation?
The aim of the Price Indication Regulation is to provide transparency to consumers and protect them from fake discounts.
