European Pricing Indication Directive
When you announce a price reduction for the products that you sell through Shopify, you need to comply with the laws and regulations that apply to your business. These laws and regulations depend on the region where your store is located and the region where you sell. Review this page to learn about some laws that might apply to your business if you sell to customers in the European Economic Area (EEA).
You can grow your business and reach new customers by selling your products in several jurisdictions. To ensure uninterrupted use of your Shopify store, make sure that you're following laws in any jurisdiction where you conduct business.
Pricing Indication Directive 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. The lowest price includes any previously reduced price that was announced as a promotion during the 30-day or more period.
The Pricing Indication Directive 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 Pricing Indication Directive applies to any promotional statements that you make about reducing the price of a product. Examples of price reduction announcements include the following:
- A percentage, such as 20% off.
- A specific amount, 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).
If you make a general price reduction announcement for your entire store, such as “20% off everything”, then at the point of sale for each product, you need to display the lowest price that you previously charged for that product within the last 30 days or more. The point of sale can be the price tag of the product in your storefront, or the product page on your online store.
Non-promotional price reductions
If you make a price reduction that doesn’t involve an announcement, then the Pricing Indication Directive doesn't apply. Examples of price reductions where the Pricing Indication Directive doesn’t apply include the following:
- 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 Pricing Indication Directive in each EEA country in which you do business. The national provisions may provide different rules or exceptions for products or price reductions, such as the following:
- 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. Then you increase the discount to 20% off in mid-December, and finally you increase the discount to 30% off right before Christmas as part of the same campaign.
National legislation may 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
When you put a product on sale for a lower price, you can use the Compare at price feature to comply with the Pricing Indication Directive. You can show your customers the product’s lowest price within the last 30 days or more, compared to the new reduced price.
- From your Shopify admin, go to Products.
- Click the name of a product.
- In the Pricing section, set the Compare at price to the product's lowest price within the last 30 days or more.
- Set the Price of the product to your new sale price.
- Click Save.
Use Metafields to display price comparisons
You can add Metafields to parts of your online store to display the lowest prior 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 prior 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 once every 30 days, then consider how you want to communicate the lowest prior price and regular selling price. For instance, you may decide to use the lowest discounted price as the price upon which the discount is applied, as demonstrated in the following example:
- A product sells for 150 EUR, but in the last 30 days, the lowest price for that product was 100 EUR.
- You decide that you want to offer the product for 50% off the lowest price of the product in the last 30 days, which was 100 EUR.
In this example, to follow the Pricing Indication Directive, you need to apply the discount to the lowest price of the product, which was 100 EUR. You can’t apply the 50% discount to the regular selling price of 150 EUR, without disclosing the 100 EUR lowest price.
Alternatively, you may decide to clearly explain both the regular selling price upon which the discount is applied and the lowest prior price. For example, if you announce 50% off the regular selling price of 150 EUR, and the lowest price during a promotion in the last 30 days was 100 EUR, then you can add descriptive information to the product page. This information makes it easy for customers to understand the different prices offered for that product in the last 30 days, such as “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.”
If you offer price reductions more than once every 30 days, then avoid only using the Compare at price feature because you can’t display both the regular selling price and the lowest prior price using the feature. Instead, 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 MSRP or a competitor’s price, without being subject to the Pricing Information Directive. 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 Pricing Indication Directive.
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 Pricing Indication Directive is aimed at addressing announcements of price reductions. The Pricing Indication Directive doesn’t apply to individualized price reductions offered as part of a customer loyalty program. The Pricing Indication Directive also doesn’t apply to personalized or targeted promotions, including when a customer receives one of the following:
- An individualized discount code for future use after making a purchase.
- An individualized discount for their birthday or other occasion.
- An individualized price reduction at the time of purchase that wasn't announced in advance.
You can find specific information online about the Pricing Indication Directive and the UCPD, such as the following resources:
- Consumer Law Database
- Directive 2019/2161/EU on the better enforcement and modernisation of Union consumer protection rules
- Directive 98/6/EC on consumer protection in the indication of the prices of products offered to consumers
- Guidance on the interpretation and application of Article 6a of Directive 98/6/EC on consumer protection in the indication of the prices of products offered to consumers