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European Price Indication Directive

When you announce a price reduction for the products that you sell through Shopify to customers in the European Economic Area (EEA), there might be laws and regulations that you need to follow.

Review this page to learn about some of the laws that might apply to your business when selling to customers in the EEA.

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Price Indication Directive (PID) overview

If you sell to customers in the EEA and you announce a price reduction, then you need to display the lowest price that you previously charged for a product within the last 30 days or more. You can display the price change on a price tag in a retail location, or on the product listing page of your online store. The lowest price includes any previously reduced price that was announced as a promotion during the 30 day or more period.

The Price Indication Directive (PID) prevents you from:

  • Advertising fake price reductions.
  • Artificially inflating the reference price before offering a discount.
  • Misleading customers about the amount of a discount.

The PID might apply to any promotional statements that you make about reducing the price of a product. The following are examples of price reduction announcements:

  • A percentage off of a previous price, such as 20% off.
  • A fixed amount off, such as 20 EUR off.
  • A new lower price, displayed together with a previous higher price. For example, “now 50 EUR, was 100 EUR”.
  • A lower starting price, displayed together with a higher new price that’ll be charged in the future. For example, “now 50 EUR, will be 100 EUR”.
  • Any promotional technique that creates the impression of a price reduction. For example, advertising a flash sale, sales price, special offer, Black Friday deal, Cyber Monday special, or buy today without paying the value added tax (VAT).
  • A general price reduction for your entire store, such as “20% off everything”.

Non promotional price reductions

If you make a price reduction that doesn’t involve an announcement, then the PID might not apply. The following are examples of price reductions where the PID might not apply:

  • Price fluctuations or decreases that don't involve a promotional statement that the price has been reduced. For example, a change in price due to costs.
  • Personalized price reductions. For example, discounts through a loyalty program or an individual discount code.
  • Comparisons to other prices. For example, a manufacturer’s suggested retail price (MSRP) or a competitor’s price.
  • General marketing claims about price comparisons or advantages that don't create the impression of a price reduction. For example, “best price” or “lowest price”.
  • Combined or tied conditional offers. For example, “buy one, get two free” or “30% off when you buy three”.
  • Cash back announcements by third-party manufacturers or distributors who don't sell products, but promise to refund customers part of the price paid.

Consider checking the national provisions that implement the PID in each EEA country in which you do business. The national provisions might provide different rules or exceptions for products or price reductions. The following are some examples of such rules or exceptions:

  • Products which tend to deteriorate or expire rapidly.
  • Products that have been on the market for less than 30 days.
  • Price reductions that are increased without interruption as part of the same sales campaign. For example, as part of a Christmas campaign, you start by offering 10% off at the beginning of December. You increase the discount to 20% off in mid-December, and then you increase the discount to 30% off right before Christmas as part of the same campaign.

National legislation might also require a longer period than 30 days to establish the prior lowest price. Refer to the Consumer Law Database for more information.

Use the compare-at price feature

If your primary market is in the EEA, then the compare-at price feature is always displayed. When you put a product on sale for a lower price, you can use the compare-at price feature to comply with the PID. You can display the product’s lowest price within the last 30 days or more, compared to the new reduced price.

Steps:

  1. From your Shopify admin, go to Products.
  2. Click the name of a product.
  3. In the Pricing section, set the Compare-at price to the product's lowest price within the last 30 days or more.
  4. Set the Price of the product to your new sale price.
  5. Click Save.

Use International to control compare-at prices

If your primary market isn't in the EEA, but you use International to sell products to customers in the EEA, then compare-at prices for these customers are hidden by default. You can choose to display compare-at prices from the International section of your Shopify admin.

Steps:

  1. From your Shopify admin, go to Settings > International.
  2. Click Preferences.
  3. Deselect Hide compare-at prices for European Economic Area (EEA) customers.
  4. Click Save.

Alternatively, you can upload compare-at prices for specific products and countries or regions using a csv file.

Use metafields to display price comparisons

You can add metafields to parts of your online store to display the lowest price you previously charged for the product at least 30 days before you announced a price reduction. Alternatively, you can use Metafields to communicate other pricing information in addition to the lowest previous price, such as the MSRP or base price. Learn more about creating custom metafield definitions.

Communicate frequent price reductions

Before you announce a price reduction, you need to display the lowest price that you charged for the product during the last 30 days or more. This price includes the lowest price offered as part of any previous discounts or promotions.

If you offer price reductions more than one time every 30 days, then consider how you want to communicate the lowest prior price and regular selling price. You need to apply the price reduction to the lowest price of the product within the previous 30 day period, or apply the discount to the regular selling price and disclose the previous lower price. You can’t apply the discount to the regular selling price without disclosing the lowest price within the previous 30 day period.

Example of communicating price reductions

For example, you sell a product for 150 EUR. In the last 30 days, you lowered the product price to 100 EUR as part of a promotion. You want to offer the product at a discount of 50% off the product price. To follow the PID, you can apply the discount and communicate the price reduction.

If you don’t want to disclose the previous lowest price, then you can apply the 50% off discount without disclosing the lowest price instead of the current selling price. Discount 50% off from the 100 EUR price, for a reduced price of 50 EUR.

If you want to apply the price reduction to the current selling price, then you need to clearly communicate the following information:

  • the discounted amount off the regular selling price (50%)
  • the regular selling price (150 EUR)
  • the previous lower price (100 EUR)
  • the discounted price (75 EUR)

You can add descriptive information to the product page of your online store or in your retail location. For example, “get 50% off 75 EUR instead of 150 EUR, our regular selling price. Our lowest promotional price in the past 30 days was 100 EUR”.

The product details in your Shopify admin have only two fields for product price: the price, and compare-at price. If you offer price reductions more than once every 30 days, then consider editing your theme to include a statement displaying both the regular selling price and the lowest prior price on each product page for which you’re offering a discount. Learn more about editing your store’s theme.

MSRP or competitor prices

You may compare the price you’re offering to other external prices, such as the MSRP or a competitor’s price, without being subject to the PID. However, comparisons to external prices are subject to Directive 2005/29/EC, the Unfair Commercial Practices Directive (UCPD). The UCPD prohibits misleading customers about the price, the way the price is calculated, or the existence of a specific price advantage.

If you decide to compare the price you offer to an external price, then make sure that the comparison is displayed in a way that doesn’t suggest to customers that it’s a price reduction. If a price comparison is perceived by the average customer to be a price reduction because of its misleading presentation, then the price comparison may violate both the UCPD and the PID.

In addition, if you use the compare-at price feature to indicate an external price instead of a price reduction, then you should make that comparison clear to customers to avoid confusion.

Loyalty programs and personalized offers

The PID is aimed at addressing announcements of price reductions. The PID doesn’t apply to individualized price reductions offered as part of a customer loyalty program. The PID also doesn’t apply to personalized or targeted promotions. For example, the PID doesn’t apply to the following personalized promotions:

  • an individualized discount code for future use after making a purchase
  • an individualized discount for a birthday or other occasion
  • an individualized price reduction at the time of purchase that wasn't announced in advance

Price reductions that are offered to or announced to all of your customers aren’t considered personalized or targeted. This includes price reductions presented as a personal offer. For example, if you offer a discount code with a message that states “a special discount just for you” that can be used by any customer, then the PID likely applies.

Resources

Review the following resources to find specific information online about the PID and the UCPD:

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