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Consumer Authority questions Black Friday practices

Research suggests prices are hiked in advance of Black Friday, then lowered again to give the impression of a discount.

Ihmisiä ostoskassien kanssa.
According to a survey by price comparison site Hintaopas, 44 percent of people in Finland plan to make purchases on Black Friday. Image: Erik S. Lesser / EPA

The Finnish Competition and Consumer Authority (KKV) said it has encountered at least two questionable practices being used by retailers in so-called 'Black Friday' or similar discount campaigns.

Black Friday, which originated in the US in the 1930s, is the shopping sales day that traditionally follows Thanksgiving, and it has become a regular fixture in Finland in recent years.

"They raise the price temporarily high so that the product can then be sold at a reduced price. It is as if an artificial image of the discount is created," the authority’s specialist Mika Hakamäki told Yle.

"Another way is that the product is offered at a regular - let's say a week-long - discount price, then it is sold for two days at the so-called normal price, which is twice as much [compared to the discounted price], then it is reduced again to the 'offer' price," Hakamäki cited as another example.

In the latter case, the discount price is in fact the genuine price of the product. Both methods are prohibited by law because they involve discount marketing that misleads consumers.

"They are prohibited by the Consumer Protection Act. If necessary, the consumer ombudsman can seek a resolution from the Market Court," Hakamäki said.

Complaints over 'Black Friday' marketing campaigns

Hakamäki added that the KKV’s consumer safety ombudsman has not received any complaints so far about Black Friday's misleading price reductions, but a number of notifications have been filed regarding illegal discount sales marketing.

"Discount and end-of-season marketing related to the changing of seasons is permitted, but it is a question of at what stage the marketing was formed in order to create an erroneous price image," Hakamäki stated.

Questionable marketing related to Black Friday has also been noted on a Finnish price comparison service called Hintaopas.fi, or 'Price Guide'.

"Last year, Black Friday's average discount rate was 4.5. At that time, the price of almost every tenth product was raised before Black Friday and then lowered to achieve higher discount percentages," the service’s Country Director Liisa Matinvesi-Bassett told Yle.

"It's important to see the product's price history"

Matinvesi-Bassett added that Hintaopas.fi looked at the price data of 400,000 products in October-November last year, and found that prices rose by a total of 8.5 per cent between 1 October and 24 November.

Many were then reduced on Black Friday, which fell on 29 November last year.

"During Black Week, stores can fluctuate prices several times a day, which may make it difficult for the consumer to know the right price. It is important for the consumer to see the price history of the product and compare it [to the reduced price], because the discount percentages can give a misleading picture," Matinvesi-Bassett said.

This year, Hintaopas conducted a survey on what consumers in Finland expected Black Friday’s discount rate to be, and found it was about 35 percent.

Even though the actual discount rate falls far short of expectations, according to Matinvesi-Bassett, Black Friday is still one of the cheapest shopping days of the year. According to Hintaopas’ data, for example, the average discount rate on St Stephen’s Day (or Boxing Day) is 2 percent.

Hintaopas’ consumer survey was conducted this year via two online surveys carried out by pollster Bilend in October and November 2020. Each survey was answered by 1,000 people aged 18-75, and the sample was nationally representative by gender, age and place of residence.

According to the survey, this year 44 percent of people living in Finland plan to make Black Friday purchases and spend on average up to 635 euros.

However, more than half (57 percent) of survey respondents said they still had little or no confidence in Black Friday’s offers and discounts.

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