When consumers see a product advertised with a discount, such as “Was $100, Now $50,” they expect that the original price was a genuine, standard rate. Whether it is a holiday sale, a clearance event, or a simple markdown, the promise of savings relies entirely on the accuracy of that “former” price. The Utah Truth in Advertising Act protects consumers from being manipulated by inflated or fabricated original prices designed to make a deal look better than it is.
What is the Utah Truth in Advertising Act?
The Utah Truth in Advertising Act, found in Utah Code Title 13, Chapter 11a, is designed to prevent deceptive, misleading, and false advertising practices within the state. Its primary goal is to ensure that businesses compete fairly and that consumers receive accurate information about the goods and services they purchase.
Under this law, a practice is considered deceptive if a business passes off goods as something they are not, creates confusion about a product’s source, or misrepresents the actual price or the amount of savings associated with a purchase.
The Rule on Fake Regular Prices
Specifically, Utah Code § 13-11a-3(1)(p) addresses the use of a business’s own former prices in advertisements. The law states that a deceptive trade practice occurs when a person or business:
“represents, in an advertisement of a reduction from the supplier’s own prices, that the reduction is from a regular price, when the former price is not a regular price…”
The law further defines a “regular price” as the price at which a supplier has recently offered the goods or services for sale in good faith in the regular course of business. In fact, Utah law explicitly states that if an item was not offered at that “regular” nondiscount price for the 15 days immediately preceding the sale advertisement, it serves as evidence that the price was not a true regular price.
In simple terms, a business cannot legally invent a high original price, or temporarily inflate a price for just a few days, solely so they can immediately “discount” it and claim you are getting a huge bargain.
Why Honest Regular Prices Matter
Truthful claims about former prices are the foundation of a fair and transparent market. When a business creates fake regular prices, it harms the consumer and disrupts fair competition.
- Financial Deception: Consumers base their purchasing decisions on the perceived value of a deal. Falsifying the original price manipulates buyers into spending money they might have otherwise saved, under the false belief that they are getting a significant discount.
- Trust and Transparency: Shoppers rely on retailers to be honest about the everyday value of an item. Constantly changing or fabricating base prices erodes consumer trust in the retail marketplace.
Fair Competition: When a company falsely advertises massive markdowns from inflated original prices, it gains an unfair advantage over honest competitors who offer genuine, transparent pricing without utilizing psychological pricing tricks.
Examples of Deceptive Fake Regular Prices
A violation of these rules regarding fake regular prices can take several forms:
- The Immediate Markdown: A furniture store brings in a new couch and instantly tickets it at “$1,000 (Regularly $2,000)” on its very first day on the floor. Since the couch was never actually offered for sale at $2,000 in the regular course of business, the “regular price” is fake.
- The Perpetual Sale: An online retailer runs a continuous, year-round “50% Off” sale on a specific piece of jewelry. Because the item is never actually sold at the higher price for any meaningful period (such as the 15-day window noted in the statute), the so-called “sale” price is actually just the standard, everyday retail price.
- The Temporary Price Spike: A hardware store artificially raises the price of a power tool from $100 to $150 for just two days, and then immediately drops it back to $100, heavily advertising a “$50 Off Sale.” The $150 price was not a genuine, good-faith regular price.
Enforcement and Consequences
The Utah Truth in Advertising Act provides mechanisms to address violations. If a court finds that a person or business is violating any provisions of this Chapter, the consequences can include:
- Injunctions: A court can order the business to stop the deceptive advertising practice immediately.
- Financial Damages: The court may award actual damages sustained from the deception or $2,000, whichever is greater.
The focus of the law is on transparency. If a business wants to boast about how much money a consumer will save during a sale, the original price they are comparing it to must be entirely real and recently used.
Need Legal Assistance in Utah?
If you have questions about consumer protection laws or believe you have been affected by deceptive trade practices, Head Law can help. Managing attorney David S. Head and his team assist clients in protecting their rights under Utah consumer laws. Contact Head Law at (801) 691-7511 to schedule a consultation.