What a crossed-out price has to be true of

The crossed-out number is a claim, not decoration

A struck-through price sitting next to a lower one is one of the most familiar shapes in online retail. It reads as a saving. That reading is the point of the design.

The Federal Trade Commission wrote guidance on exactly this shape. It sits in title 16 of the Code of Federal Regulations, part 233, under the heading Guides Against Deceptive Pricing.

The first of its five sections opens by naming the practice. "One of the most commonly used forms of bargain advertising is to offer a reduction from the advertiser's own former price for an article."

So the higher number is not styling. It is an assertion about the seller's own past conduct, and the guidance treats it that way.

What makes the former price legitimate

The test is written into the same paragraph, and it has four parts worth reading slowly.

A former price supports a comparison "If the former price is the actual, bona fide price at which the article was offered to the public." The same sentence adds that it must have been offered "on a regular basis for a reasonably substantial period of time." Where that holds, the guidance says, "the bargain being advertised is a true one."

Actual and bona fide is the first part. Offered to the public is the second. On a regular basis is the third. For a reasonably substantial period of time is the fourth.

A price that fails any one of those is not a former price in the sense this guidance uses. It is a number the seller put on the page.

The inflated-then-cut pattern the guidance was written against

Paragraph (a) describes the failure mode directly. It covers the case "where an artificial, inflated price was established for the purpose of enabling the subsequent offer of a large reduction."

In that case the guidance says the advertised bargain "is a false one; the purchaser is not receiving the unusual value he expects."

The conclusion it draws is the one a reader should carry away. The reduced price "is, in reality, probably just the seller's regular price."

The worked example in paragraph (c) walks a retailer through exactly this sequence. He raises a price he expects to sell little at, holds it briefly, then cuts it back to the level he always charged and advertises the cut. The guidance calls that example obviously false.

No sales at the higher price is not automatically fatal

This is the part most summaries get wrong, and the guidance is explicit about it.

Paragraph (b) states that "A former price is not necessarily fictitious merely because no sales at the advertised price were made."

What it demands instead is a price at which the product was "openly and actively offered for sale, for a reasonably substantial period of time." It adds that the offer must have been made "in the recent, regular course of his business, honestly and in good faith."

There is a second limit in the same paragraph. An advertiser "should scrupulously avoid any implication that a former price is a selling, not an asking price." The guidance gives phrasing built on the word sold as its example. Such wording is permitted only "unless substantial sales at that price were actually made."

So an asking price honestly maintained can be a valid comparison. Wording that implies people bought at it, when they did not, is a separate problem.

Four other ways a former price goes wrong

Paragraph (d) lists variations, and each one describes something a reader can look for.

A price the seller "never offered the article at all" is the first.

The second is a price "which was not used in the regular course of business." The third is one "not used in the recent past but at some remote period in the past, without making disclosure of that fact." Note the escape hatch built into that one: disclosure of the remoteness.

A price "that was not openly offered to the public, or that was not maintained for a reasonable length of time, but was immediately reduced" is the fourth.

That last one is the shape of a permanent sale. A price that existed only long enough to be crossed out was not maintained for a reasonable length of time.

A bare Sale banner is also covered

Paragraph (e) reaches the case where no former price is shown at all.

Where the reduction is not stated, the section says, "the advertiser must take care that the amount of reduction is not so insignificant as to be meaningless." It reaches that case by naming an ad that merely states the word Sale.

The standard it sets is a reader's standard, not an accountant's. The reduction "should be sufficiently large that the consumer, if he knew what it was, would believe that a genuine bargain or saving was being offered."

The same paragraph confirms that words like Regularly, Usually and Formerly carry the same obligation as a stated number. Naming a former price with a label instead of a figure does not lower the bar.

The catch-all section, and the four practices it names

Section 233.5 closes the part and covers variations the earlier sections do not name individually. It says they "are, in the main, controlled by the same general principles."

Four are spelled out. The first: retailers "should not advertise a retail price as a “wholesale” price."

The second: they "should not represent that they are selling at “factory” prices when they are not selling at the prices paid by those purchasing directly from the manufacturer."

The third: they "should not offer seconds or imperfect or irregular merchandise at a reduced price without disclosing that the higher comparative price refers to the price of the merchandise if perfect."

And the fourth concerns an advance sale. Retailers "should not offer an advance sale under circumstances where they do not in good faith expect to increase the price at a later date." Nor make a limited offer which is not in fact limited.

What this article does not settle

Part 233 is titled Guides Against Deceptive Pricing in the Code itself, and each of its five sections closes with a bracketed label reading Guide I through Guide V. Its authority note cites sections 5 and 6 of the Federal Trade Commission Act.

What weight a Commission guide carries in any particular enforcement action, and how a court would treat it, are legal questions this page does not answer. Nothing here is legal advice.

Nor does anything here describe any seller by name. The guidance is written about advertisers generally, and this is a summary of what it asks, not a finding about who meets it.

The useful move for a reader is narrower and entirely within reach. When a peptide page shows a higher price with a line through it, the guidance says that number is a claim about how the seller actually traded. Watching whether the same struck-through figure is still there next month is a check anyone can run.

Sources

Each document below is named as it names itself, with the date printed on that document rather than the day it was read.

1. Title 16 Code of Federal Regulations section 233.1, Former price comparisons — Electronic Code of Federal Regulations, Office of the Federal Register, November 1967
2. Title 16 Code of Federal Regulations section 233.5, Miscellaneous price comparisons — Electronic Code of Federal Regulations, Office of the Federal Register, November 1967