Strikethrough pricing is a popular way for businesses in Germany to incentivise customers to purchase goods. However, it cannot be used without restriction. Businesses must comply with specific legal requirements in order to prevent their strikethrough pricing from being deemed unfair or misleading.

In this article, you'll learn what strikethrough pricing is, what legal requirements it's subject to in Germany, and what aspects of the 30-day rule businesses need to consider. We'll also explain when strikethrough pricing is considered misleading, what comparison and reference prices the law permits, and how long special prices can be advertised.

Key takeaways

• Businesses in Germany are allowed to advertise using strikethrough pricing, but they must present the actual price savings in a transparent and truthful manner.
  
• When a business discounts a product using strikethrough pricing, the reduced price must generally be based on the lowest price the business charged for that product in the previous 30 days.
  
• Under certain conditions, a current recommended retail price (RRP) or a competitor's price can also be used for comparison.
  
• Violations of the regulations can result in a formal warning, injunctions, and fines of up to €25,000.
  

What is strikethrough pricing?

Strikethrough pricing is a form of price promotion in which a higher price is contrasted with a current – usually lower – price. The higher price is typically displayed as a strikethrough price. The aim is to make it immediately clear to shoppers how much they can save by taking advantage of the offer.

In practice, the three most common ways of advertising savings are:

• The business's previous price (i.e., "was" vs. "now" pricing): The current price is shown in relation to the price the business previously charged for the product.
  
• Recommended retail price (RRP): The business's own price is compared with the manufacturer's RRP.
  
• A competitor's price: The business's own price is compared with the price another company charges for the same or a comparable product.
  

Strikethrough pricing is used frequently as a sales promotion tool because it can increase a customer's incentive to buy. However, advertising with strikethrough prices carries legal risks for businesses in Germany.

What legal requirements apply to strikethrough pricing in Germany?

In principle, businesses in Germany are free to set their own prices. They can increase or decrease their prices and also advertise price adjustments. However, specific requirements apply to advertising using strikethrough prices. Such advertising must not mislead customers regarding the actual price or the savings.

The 30-day rule

If a business is advertising its current price in relation to a price it previously charged for a product, Section 11, Paragraph 1 of the German Price Indication Ordinance (PAngV) applies. According to this regulation, any reduction in price must be indicated in relation to the lowest total price charged in the preceding 30 days.

Consequently, the strikethrough price cannot be chosen arbitrarily. It must be set in relation to the lowest price the business charged for the product in the 30 days prior to the price reduction. This rule is intended to prevent businesses from raising their price shortly before rolling out a promotion and then advertising the newly discounted price as representing major savings. The 30-day rule applies to discounts offered both online and in physical shops. The 30-day reference price must be displayed in a manner that's clear, easy to read, and unambiguous.

Legal exceptions

Not every advertisement featuring a lower price falls under the 30-day rule. The key distinction is whether or not a price reduction is announced to customers. Mere price fluctuations or price drops that are not advertised as reductions generally do not fall within the scope of this rule.

For example, the 30-day rule does not apply to:

• RRP and competitor comparisons: Simple comparisons with a manufacturer's current recommended retail price or the prices offered by other businesses, provided these are not presented as the seller's own price reduction.
  
• General price statements: Statements such as "low price" or "best price", provided they do not imply a reduction in price.
  
• Volume discounts: Bundled offers such as "buy one, get one free" or "3 for 2".
  
• Individual discounts: Genuine individual price reductions, such as personalised discount codes, that are not offered to the general public.
  
• Early payment discounts: Discounts offered for settling an invoice within a specified time frame.
  
• Perishables: Price reductions on highly perishable goods or goods with a short shelf life, provided the reduction is due to imminent spoilage or expiry and this is clearly indicated to consumers in an appropriate manner.
  

However, caution is advised regarding discounts that appear personalised, but which are actually available to a large customer base. In such cases, the 30-day rule could apply.

What aspects of the 30-day rule do businesses need to be aware of when rolling out price reductions?

Before advertising any price reductions, businesses should carefully review their prices to identify the lowest price they have actually charged in the previous 30 days. This price serves as the basis for the price comparison.

If an online shop initially sells a product for €100, then lowers the price to €90, and later to €80, any further reduction in price must, in principle, be compared to the lowest price charged in the previous 30 days. However, if the shop reduces the price successively, without any gaps in these reductions, then Section 11, Paragraph 2 of the PAngV applies.

Special rule for successive discounts

According to Section 11, Paragraph 2 of the PAngV, a special rule applies to price reductions that are implemented successively and without interruption. For example, if a business successively reduces the price for an item as part of a clearance sale – bringing the original price of €100 down first to €80, then to €60 and, finally, to €40 – it is not required to determine a new reference price from the previous 30 days for each new reduction. When rolling out successive discounts, the reference price that applied at the start of the campaign can be used for all subsequent reductions.

Documenting price history

From a practical perspective, it's a good idea to maintain clear documentation of the price history of any goods you advertise. This will make it easier for you to quickly determine, during a discount campaign, which price was the lowest within the past 30 days. Capturing this price data is a particularly good idea for businesses that change their prices frequently or use automated discounts.

When does the law consider a strikethrough price to be misleading?

Even if a business is compliant with the regulations of Section 11 of the PAngV, its advertising must not be misleading. Section 5 of the German Act Against Unfair Competition (UWG) prohibits any commercial practice that misleads consumers regarding the main characteristics of the product or service, or that is likely to cause a consumer to make a commercial decision they would not otherwise have made.

Consequently, strikethrough prices can be problematic if:

• The stated previous price was never actually charged
  
• The previous price was charged only for an unreasonably short period
  
• The price was deliberately increased and then decreased again in order to create the illusion of savings (also referred to as "artificial price inflation")
  
• It's not clear for consumers which product and which price the reduction applies to
  

Which prices can be used as comparison and reference prices?

The key factor in strikethrough pricing is determining which price is compared to the current sales price. In addition to using their own previous price, businesses can also reference the manufacturer's RRP or a competitor's price. In all cases, it must be clear what type of comparison is being made.

When can RRPs be used in advertising?

Unlike a business's own previous price, a manufacturer's recommended retail price is not a price that the retailer itself previously charged. Therefore, the 30-day rule under Section 11 of the PAngV does not apply to RRP comparisons.

The RRP must be based on the actual retail price recommended by the company that manufactures the product and must be correct at time of advertising. It must also be clear to consumers that it is a recommended price. This can be achieved using a prominent "RRP" label, provided the overall context is not misleading.

Particular caution is required when advertising a percentage price reduction. Such savings cannot be calculated based on the RRP alone. Instead, businesses might have to base their own reduction in price on the lowest price they charged in the past 30 days.

Advertising with strikethrough pricing becomes particularly problematic if the RRP changes or is withdrawn, or if the way the price is presented gives a false impression of how significant or up-to-date the RRP is.

What are the rules on comparisons using competitor prices?

If a business advertises its price in comparison to a competitor's price, the advertisement is subject to the rules on comparative advertising under Section 6 of the UWG. In such cases, the price must relate to offerings that are comparable in terms of their main characteristics and conditions. Differences in scope of services, features, or additional costs can compromise the validity of the price comparison. In addition, the cited comparison price must actually be in effect.

Therefore, when using competitor offers in strikethrough pricing, businesses should regularly review whether the competitor price they've cited is still valid and whether the offerings being compared are still comparable. Changes could result in a business's advertising being classified as misleading.

How long can online stores advertise promotional pricing?

A discount campaign does not necessarily have to be limited to a set duration from the outset. Section 11 of the PAngV does not set a general maximum duration for price reductions either. However, this does not mean that a promotional price can be advertised as a special discount for an indefinite period. The key here is whether the advertisement continues to give the impression of a special, limited-time offer.

Duration limits for strikethrough pricing

There is no universally applicable duration limit for strikethrough pricing. Whether a strikethrough price is still permissible after an extended period of time depends on the individual circumstances of the case. For example, what type of product does the strikethrough price apply to, how much has the price been reduced, how long was the previous price in effect, and what are target consumers' expectations?

Advertisement becomes problematic when a business presents the same reduced price as a special promotion over an extended period of time. This can create the impression that the savings are only temporary, even though the advertised price has long since become the standard selling price.

Limited-time offers

Businesses in Germany should make it clear when a promotional price is valid for a limited time only. If they use phrases such as "only through 30 September 2026," or "while supplies last," then the promotion must in fact end on 30 September 2026, or when supplies run out.

An extension is not automatically prohibited. However, businesses should inform consumers clearly that the offer has been extended, and the overall design of the campaign must not create the false impression that savings are available for a limited time only.

What are the potential penalties for misleading pricing?

Violating the rules governing price reductions can have various legal consequences for businesses in Germany. Violation of Section 11 of the PAngV can constitute an administrative offence under Section 20 of the PAngV, while Section 3 of the German Economic Offences Act of 1954 (Wirtschaftsstrafgesetz) stipulates a fine of up to €25,000 for the same offence.

In addition, misleading price statements can constitute a violation of Section 5 of the UWG. In such cases, pursuant to Section 8 of the UWG, competitors and some professional bodies can demand that the offending company remove the misleading statements. In practice, this can result in a formal warning and, potentially, legal proceedings.

Injured parties can also consider filing claims for damages, subject to the conditions of Section 9 of the UWG. In cases of intentional or grossly negligent violations, Section 10 of the UWG allows for the forfeiture of profits.

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FAQs about strikethrough pricing in Germany