Price matching is a strategy used by businesses to agree to lower prices to match the price of competitors. This typically occurs when the customer presents evidence of the lower price from a competitor. It ensures a business can remain appealing to customers and prevents businesses from losing customers simply due to the price of their product. However, there are many aspects businesses should understand to effectively use the price match strategy. Here are some basics of what you should include in your Price Match Policy.
1) Objectives of the Price Match Policy
This should be the first section of your policy outline. By making this clear, you can ensure both the employees and customers understand purpose of price matching. You should outline the following:
- Your business’ commitment to provide lower prices subject to following terms and conditions
- Summary of the main points of the policy
- Main purpose and objective of offering price matching
2) Nature of Competitor
This section will be one of the terms and conditions for price matching at your business. You should have a detailed description of the nature of competitor that you will allow price matching. The requirements for the competitor can be that the business:
- Is a registered Australian business (i.e. has an ABN)
- Has been registered for Goods and Services Tax
- Has an on-site store located in Australia
- Is not an unauthorised distributor
It is entirely up to you which requirements you want to include or exclude. You may want to make the eligibility stricter or more lenient depending on your unique circumstances. It can also be helpful to include specific business names that you will allow or refuse for price matching.
3) Product Specifications and Availability
This is also one of the terms and conditions you should include about the product you will allow price matching. Consider including the following about the lower priced product from a competitor. The product:
- Must be the exact same (in model, description etc.)
- Is available for immediate purchase in the same condition (i.e. it is in stock at the competitor’s store currently)
- Includes GST and delivery charges in its price
This ensures you are not allowing price matching for items that do not offer the same features as the ones at your store. And again, similarly to the ‘nature of the competitor’ section, you can choose to make the product specifications stricter or more lenient depending on your own objectives.
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Get started4) General Guidelines for the Price Match Policy
Guidelines should be included in your price matching policy to inform the customers and employees on how to actually put price matching into practice. This could specify:
- The need for customers to present a valid and authentic evidence of the competing product’s price at time of purchase
- Whether price matching is available for online purchases or in-store purchases only
- Whether or not price matching can be considered after the time of purchase (for example, you could allow price matching within 7 days of purchase if customer can present a valid receipt)
5) Product Exclusions
This is an important section of your price match policy in order to clearly state the items that cannot be price matched. For example, sale, clearance or limited availability products can be excluded from the price matching guarantee.
Final Note on Price Match Policy
Price matching is a great way of maintaining a good relationship between the business and customer. It allows for a transparent way for customers to seek the best prices at your business. There are so many more aspects your price match policy should cover such as the nature of proof, product verification, honouring the policy, location, timing, number of items and any other further considerations. It can be daunting to attempt to draft a price match policy all on your own. Remember, you can also consider getting legal advice for professional assistance.
