Pricing confusion at the Chemist Warehouse

Fluorescent yellow and pink specials tickets littered the shelves. Brightly coloured “catalogue”, “stop paying too much” and “why pay” tickets had been inserted over the top of the regular pricing, suggesting a lot of products were on sale.

But are you really getting a special? When I peeped behind some of the tickets, it appeared maybe not.

So, Consumer NZ decided to take a closer look at the way products are advertised instore, and in the catalogue at the Chemist Warehouse.

Misleading ‘stop paying too much’ price tickets

We found eight products with what appeared to be a temporary “stop paying too much” fluorescent pink price ticket, but when we looked under the label the shelf price was the same.

Melrose Essential Green Biotic Powder (195g) was on special for $29.99, but when we looked under the pink label, the usual price was $29.99.

It was the same story for Red Seal Mi-Chai Tea (25 bags) with a “Stop paying too much” ticket of $3.99, but its usual price was the same.

We found the same potentially misleading pricing for Muscle Nation Protein Water, two Regaine for Women products, Bunjie Baby Massage and Bath Oil, Goat Kids Organic All in One, and Optislim Life Shake.

We think these tickets give shoppers the impression the products are on special and are misleading.

What is recommended retail pricing?

A lot of the supposed specials at the Chemist Warehouse are based on goods being priced under their recommended retail price (RRP).

A manufacturer can suggest a RRP for a retailer to sell their product at, but there’s no obligation for the retailer to use that price.

It can be misleading for a retailer to compare its prices to the RRP, unless it’s the genuine RRP and the retailer can show that the product’s for sale at that price elsewhere.

When we shopped instore at Chemist Warehouse, we found the Wagner range of supplements with an “available only at Chemist Warehouse” shelf tag. The products were also labelled as a catalogue deal, with discounts below the RRP.

Given it is being presented that the supplements are sold exclusively at Chemist Warehouse, we think it’s potentially misleading to advertise savings using the RRP. While the RRP is genuine, there’s no obligation to use it and the product is not available elsewhere – so there’s no actual saving.

We also saw a Bondi Protein Co protein powder with the same “available only at Chemist Warehouse” ticket. The shelf label stated, “why pay more”, but given it’s not available elsewhere, you wouldn’t (and couldn’t) be paying more.

Misleading catalogue deals

Instore, we also saw the Centrum range of supplements labelled as “catalogue” deals. But when we looked through the catalogue that we picked up instore, we couldn’t see the supplements listed.

It was the same for Loreal Age Perfect moisturisers, which were labelled as catalogue deals, but weren’t in it.

We think both products were mislabelled to give shoppers the impression they were on sale.

Rather than being a “catalogue” deal, the item was priced at under the RRP, as is Chemist Warehouse’s usual practice.

Misleading pricing in the catalogue

Flicking through the Chemist Warehouse catalogue, we saw several ways product prices are listed that could mislead shoppers into thinking the products are on special.

Elizabeth Arden Pretty perfume was advertised as “100ml! $24.99” on the front page of the catalogue. The exclamation mark could suggest the perfume is cheaper than usual, yet no discount or comparison was offered or shown.

In total, exclamation marks were used in relation to 15 perfumes on the front page of the catalogue, while other perfumes were shown with discounts off the RRP.

Tags such as “great!”, “60 capsules!” and “wow!” were also used on some products, alongside other products with genuine discounts – giving the impression all the products were discounted, when no actual price comparison was offered.

We asked Chemist Warehouse to explain the different price tags it uses instore and in its catalogue, but we didn’t hear back from it before we went to print.

We think the number of price tickets, and the overuse of exclamation marks, gives shoppers the impression they’re getting a deal.

The psychology of price tickets

Bodo Lang is a professor of marketing analytics at Massey University. We asked him what impact the multiple tickets and labels are likely to have on shoppers.

He said using lots of stimuli (like the different ticket labels) can suggest to shoppers that products are cheap.

“Research has shown, that simply placing a red border around a price, without changing the price at all, will suggest to consumers that this must be a special price,” he said.

This means that shoppers are more likely to buy the product. The more labels that indicate prices are low, or the lowest available, the more “this effect is magnified” and shoppers will buy more.

Catalogues, website graphics and instore queues all add to a shopper’s impression that they’re getting a special deal.

Five tips for shopping at Chemist Warehouse

• Track prices for what you intend to buy for a few weeks to get the best deal possible.

• Don’t let the brightly coloured tickets distract you into thinking you’re getting a good deal. Lift the ticket to see the price that a product’s usually sold for at Chemist Warehouse. There may be no change.

• Try and visit during off-peak shopping times, so you can see everything and clearly compare product prices.

• If you do see a product for a cheaper price elsewhere, Chemist Warehouse will match that price and give you another 10% off the difference (excludes online-only products).

• Take the “$X off RRP” labels with a grain of salt. Pricing items under RRP is the company’s business model. Our online tracking survey showed that Chemist Warehouse seldom sells anything for the RRP.