Reference Price ("Was" Price)

Every discount is a comparison between two numbers: the price now and a reference price. On the page, the reference is the crossed-out "was" price, a "compare at" price or a recommended retail price. Pricing researchers call the pull of that comparison the reference price effect: for example, the same $60 feels cheaper next to a struck-through $90 than it does on its own.

There are two kinds:

External reference price. The number shown to the shopper: a former price, a list price or a competitor's price.

Internal reference price. The price the shopper already expects, built from past purchases and from what other stores charge. If the external reference sits far above it, shoppers may find the claim less credible.

A higher reference price makes any discount look deeper, so it is easy to abuse. A "was" price that was charged for one day, or never, creates a fake discount.

In both the EU and the US, rules tie a reference price to prices the store actually applied or offered. In the European Union, Article 6a of the Price Indication Directive (98/6/EC), added by the Omnibus Directive (EU) 2019/2161 and applicable since 28 May 2022, requires an announced price reduction on goods to show the prior price: the lowest price the trader applied in a period of at least 30 days before the reduction. The Court of Justice has ruled that an advertised percentage must be calculated from that price (Case C-330/23, 26 September 2024). In the United States, the FTC Guides Against Deceptive Pricing (16 CFR Part 233) treat a former-price comparison as fair when the item was openly and actively offered at that price, in good faith, for a reasonably substantial period in the recent, regular course of business.

For a brand this cuts both ways: your own "was" prices need a record behind them, and a dated price history shows whether a competitor's discount is as big as its banner says. This is not legal advice: whether a claim breaks a rule in a given country is a question for your legal counsel.

1. Record the price every day. RivalSweeper records product prices every day and keeps a dated history for each product page. The record starts the day monitoring starts, so build it before you need it. A formal was/now audit, delivered as an evidence pack, is available on request.

2. Find the lowest price in at least the 30 days before the reduction. For an EU price-reduction claim on goods, that is the prior price. Member States may set different rules for a few cases, such as reductions that grow step by step. Compare it with the "was" price shown. A recommended retail price or a competitor's price is a different comparison, judged under general rules on misleading advertising.

3. Recompute the stated discount. Calculate the discount depth from the sale price and the recorded 30-day low, and set it next to the percentage on the banner.

4. Check how long the "was" price was really offered. For US former-price claims, the FTC Guides look for a price offered for a reasonably substantial period in the recent, regular course of business. Several states add their own rules.

5. Compare like for like. Only compare prices from the same store, market and currency. RivalSweeper counts a change as a price move only when the source, market and currency all match, and it does not treat a jump of more than 5x between two observations as a price move.