'Lifting the tag': colourful promotional discount tags confusing shoppers

Choice found a number of price tags displayed in major chemists offered "discounts" from inflated recommended retail prices (RRP).

Choice also said that brightly-coloured 'great value' tags were used to attract customers' attention to products that were not discounted.

"We regularly hear from people who are frustrated with how major pharmacies communicate prices and specials in store," Choice senior campaigns and policy advisor Bea Sherwood said.

In a survey of more than 1000, one-third of respondents found it difficult to tell if colourful promotional tags represented a discount, Choice found.

Choice showed survey respondents a discount tag for a toothpaste sold at TerryWhite Chemmart to determine their perception of the offered savings.

"In this example, over two-thirds of consumers thought Terry White was providing a $5.99 discount on this toothpaste," Ms Sherwood said.

"You can see why, as the tag lists the product's $6 price as a discount on the RRP of $11.99," she said.

"However, when we asked Terry White if they'd previously sold the toothpaste for $11.99, they confirmed it had never been sold at that price at the store where we took the photo."

Choice also showed survey respondents a discount tag from Chemist Warehouse.

"This Chemist Warehouse tag highlights that customers will make a $0.51 saving on the RRP. Over half of our respondents agreed that $0.51 was the discount on offer," Ms Sherwood said.

"Chemist Warehouse didn't provide evidence they had ever sold this product for the RRP and lifting the tag shows that the usual shelf price is the same as the 'cheaper' price," she said.

Choice also examined the use of brightly-coloured tags attracting customers to products offering 'great value'.

"The price of this lip balm at Priceline is supposedly 'great value', but when we asked Priceline to confirm whether it was a discount or not, they told us it wasn't," Ms Sherwood said.

"While the label technically doesn't claim to offer a discount, the use of the value claim and the bright pink colour may cause consumers to believe the item is on sale," she said.

Choice said it was concerned over the lack of transparency on pharmacy labels, particularly the use of RRPs, which could lead customers to overestimate the value of the deal on offer.

"If the pharmacies have never offered those products at that RRP, consumers may be misled about how much they're really saving, making it harder for people to get the best value," Ms Sherwood said.

"There has been a race to the bottom on these tactics, which makes it hard for businesses using transparent pricing to compete."