Skeezix
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If the price is so high that they're not moving any units, I'd argue it's over-inflated. Would a retailer fail the test for setting an over-inflated regular price and putting the items on "sale" to generate sales? The Competition Bureau thinks so with mattresses. If I were to build a case based on items that went on sale, I'd request the sales figures for the regular price and for the sale price first as part of discovery.
The consumer isn't saving, say 50%, if no one would have bought that item at the original price. If no one paid 100% of the price, no one is saving money in the sale. To imply that a sale price is any sort of value to the consumer requires the original price that have generated at least minor sales and profit, or it's deceptive. Put differently, at least a small group of consumers had to agree with the price and buy the item, generating a profit for the retailer. If that didn't happen, it was over inflated and should have been adjusted without a sale or any implied message of savings.
No, again, that's not the law.
Someone's opinion as to what is, and what isn't, "over-inflated" isn't the law. The law doesn't typically micromanage pricing like that. And that the law typically doesn't set thresholds as to how much margin a retailer can achieve.
Retailers can charge whatever they want for a product. They are also entitled to put those products on sale if they can't sell them at the regular price. What they are not entitled to do is to misrepresent the regular price to make the sale price look better than it is. Having tried to sell something at a price no one was willing to pay does not, by itself, violate the law.
You're misrepresenting what the Competition Bureau has alleged. The claim has nothing to do with a regular price being "over-inflated" (again, not against the law), but rather that the regular price was misrepresented. This is a crucial legal distinction, and represents the difference between legal and illegal, but one which you're glossing over.
What do you mean "building a case"? On what basis would you get discovery?
Legally the original price need not "have generated at least minor sales or profits, or it's deceptive", nor does "a small group of consumers ha[ve] to agree with the price and buy the item". That's not the test. Selling a substantive volume of an item is one indicator that the regular price was legitimate, but the retailer could also be on the right side of the law if it sells zero units as long as it recently offered them at that price for a substantial period of time. The Tribunal and the courts typically use a 50% test to determine if something was being sold at a price in good faith for a substantial period of time, depending on the facts of any specific case. For example, when the Competition Bureau took Sears to the Tribunal about 10 years for its tire sales, the Tribunal determined that one brand of tire was on sale for more than 80% of the time in any given year. The Tribunal determined that if the tire was on sale that often, the regular price was not the price for a substantial period of time, and therefore the promoted regular and sale prices were deceptive. Not because anything was "over-inflated." Sears could sell tires for $1,000,000 each if it wants, and can then later put them on sale, as long as it keeps on the right side of the Competition Act in how it does so. I really suggest that you read some of the case law.
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