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Bye Bye, Component Pricing?

So what is “Component Pricing”?  It’s where a seller advertises a product price in a series of  separate prices.  Some might say that it is an attempt to deliberately confuse consumer, and seriously hinders someone’s ability to compare prices – especially if different suppliers use different “components”.

“Federal Consumer Policy Minister Chris Bowen today released draft legislation to require retailers to reveal the all-inclusive price of the products on their shelves.”  Sources Sydney Morning Herald [^] & Smart Company [^].

The actual press release can be found at [^].

Where do you see it?

  • Mobile Phone Contracts – Handset $199, and minimum monthly calls of $19 per month for 24 months. 
  • New Cars – Car $24,990, Dealer Delivery $2,000, Stamp Duty $100, Registration $750. 
  • Flights & Holiday Packages – Cost + Taxes and Charges.  In lots of cases these are all hidden in the small print at the bottom of the ad. 

At their worst, examples of component pricing can be borderline deceptive – in Melbourne’s Green Guide some of the ads for computer upgrade packages are very competitive, that is until you factor in the additional $50 labour charge in the fine-print.

 Now the interesting thing is that this, or a similar amendment, was last proposed two years ago ( [^]) and nothing was done anything about it!  The other thing is that component pricing will not be outlawed, but the “single price” that a consumer has to pay must be displayed in a prominent position.  The interpretation of that is going to be interesting, no say the least.

The bad news; airlines with overseas taxes payable overseas (such as the NZ Departure Tax) and Car Dealers with variable registration costs (depending on postcode the vehicle is registered in) will be let off the hook for those components.  But, they will have to clearly indicate that those costs are not included. 

 Let’s see if this amendment makes it into law this time around.

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