Since June 2022, an annex to the consumer protection law has entered into force in the European Union, limiting the use of discounts. The article explains how it affected the promotional activities on Joom. The changes only affect customers from the EU.
Restrictions on the use of discounts
According to the regulation, a price reduction can be announced only if a product’s current price is less than its lowest price within a period of 30 days. In this case, the lowest price is considered the “prior price” and appears as a strike-through price. The current price is also indicated on the product, and the amount of discount is calculated according to the strike-through price.
Let's look at the example:
The regular price for a product is $10. Its lowest price within 30 days before the current promotion was $8. To be considered as a discount, the price must be below $8. Therefore, the price of $9 will not be indicated as a discount but the current price $7 is shown as a discount off the $8 MSRP (the lowest price).
How are discounts displayed on Joom?
The system ignores MSRP from merchants. The strike-through price is calculated as the lowest price within 30 days before the current promotion. The amount of discount is calculated based on the strike-through price. If the current price is greater than or equal to the lowest price within the last 30 days, the discount, and the strike-through price will not be displayed.
Merchants can still lower their prices based on the regular prices, even if the current price is greater than the lowest price within the last 30 days. However, it will not be displayed as a discount.
For example, 10 days ago, the price ($9) was lower than the regular price ($10), but still higher than the lowest price in the last 30 days ($8).
In such cases, Joom will still notify customers about the price benefits they get from buying the product so that they can appreciate it. Now we are testing several options for displaying the benefits.
How does it influence promotions?
Limit on promotion participation
To comply with EU regulations, a product on Joom may participate in promotion for a minor part of the time. In other words, a product must be sold at the regular price for at least half of the days in a month.
However, merchants can still add products to promotions for more than 50% of calendar days. Products that exceed the promo participation limit will be automatically removed from the promotion and the price reduction will not be applied.
Now Joom is testing other options for working with products that have exceeded the promotion participation limit, such as issuing points to users instead of discounts, etc.
👉 For more information about Joom promotions, please refer to the article: Promotions.