Promo codes and discounts : what the regulations really say

Promotional codes displayed permanently, “exceptional” discounts that return every week, combining them with cashback: commercial practices around discount codes are evolving quickly, but they remain governed by precise rules. Here is what the regulations say and how to make the most of them without being caught by fake discounts.

The reference price, cornerstone of any displayed discount

As soon as a retailer announces a price reduction, online as well as in-store, they must display a reference price: the lowest price applied during the 30 days preceding the offer. Both this reference price and the promotional price must appear on the label or product sheet, possibly with the percentage of discount granted. This rule is intended to prevent artificial markdowns, where the “struck-through” price would have been inflated just before the start of the promotion.

The “Omnibus” directive strengthens protection against fake discounts

At the European level, the so-called “Omnibus” directive has tightened the obligations of retailers, online as well as offline, to combat misleading discount announcements. It imposes increased transparency on the basis for calculating discounts so that the consumer can verify the reality of the claimed savings before buying.

Permanent promo codes: a practice already sanctioned

The courts have already ruled on abuses in the sector: a court of appeal condemned a retailer whose promotional code policy was in fact almost permanent, to the point where more than 92% of sales were made “on promotion.” Such a practice can be qualified as a misleading commercial practice, insofar as the discount is no longer exceptional. Penalties for non-compliance with the rules on displaying discounts can reach 3,000 euros for an individual and 15,000 euros for a company.

Combining cashback and a promo code, a legal and common practice

Nothing, however, prohibits combining a discount code with a cashback program: the two mechanisms are based on different logics (an immediate discount on the displayed price on the one hand, a subsequent reimbursement of a commission on the other) and their combination is a common commercial practice, provided that the displayed reference price remains compliant with the regulations. For the consumer, the main vigilance is to check the reference price before buying, rather than the legality of the combination itself.

• Check a product's price history before trusting an displayed percentage of discount.
• Favor codes issued directly by the retailer rather than unverified codes circulating on forums.
• Be wary of a promo code displayed continuously for several months: it is then probably not an exceptional offer.

To explore these topics further, our section law, lawyers and justice regularly covers the regulation of commercial practices, while e-commerce, shopping and stores and everyday life and society offer other tips for better consumption.

Frequently asked questions

What is the “reference price” of a discount?

It is the lowest price applied by the retailer during the 30 days preceding the announcement of the discount. It must be displayed alongside the promotional price so that the actual discount can be verified.

Is a promo code displayed permanently legal?

No, if it is no longer exceptional: the courts have already sanctioned retailers whose almost all sales were made via the same code, a practice deemed misleading for the consumer.

Can you combine a promo code and a cashback offer?

Yes, this combination is legal and common: the promo code reduces the displayed price at the time of purchase, while the cashback then refunds part of the amount spent, provided that the displayed reference price complies with the regulations.

Sources

• economie.gouv.fr (DGCCRF) — Price reduction announcements: what you need to know
• APP — Sales and online promotions: reference price and sanctions
• Generali — Sales regulations: guide to the rules to follow

This article was written with the help of artificial intelligence. Editorial policy