‘No more imaginary discounts from retailers’

Retailers cannot impose "imaginary discounts" to patrons by making it appear they get their money’s worth even if the tag prices actually carry surcharges, both on cash and credit card payments, a lawmaker said yesterday.

Catanduanes Rep. Joseph Santiago said this was the assurance given to him by director Victorio Mario Dimagiba, chief of the Department of Trade and Industry’s Bureau of Trade Regulation and Consumer Protection (DTI-BTRCP).

Adopting the (card) surcharge-inclusive price as regular tag, and then selling the same product "to cash purchasers at a lower price in the guise of a promotional discount" constitutes a violation of the DTI’s Administrative Order No. 10 series of 2006.

In a statement, Santiago said AO 10, which took effect last Nov. 5, "expressly prohibits retailers from imposing any extra charges on purchases of goods or services paid via credit card."

"Violators face up to six months in prison plus stiff punitive fines," he said.

The lawmaker is against credit card surcharges, particularly the five to 10 percent interest, saying it is "totally oppressive, discriminatory and unethical."

The DTI’s order "gives more meaning" to the present Consumer Act, he stressed.

Santiago sought Dimagiba’s position on consumers’ complaints that retailers use "(card) surcharge-inclusive price as base tag and sell the products or services at an imaginary discount to those paying in cash.

"Aside from the fact that this modus operandi is a circumvention of Article 81 of the Consumer Act, for which AO 10 was issued, it is likewise a violation of Article 50 of the same law, which proscribes acts or practices of sellers that are deceptive," Dimagiba noted.

He added that under Article 50 (e), a practice is deceptive when it represents that a specific advantage of a consumer product exists when in fact, it does not. Accordingly, he said violators would be held administratively and criminally liable under Sections 164 and 60 respectively, of the same statute.

AO 10 categorically requires every retailer to display only one tag to indicate the price of each product or service, as mandated by Articles 81 to 83 of the Consumer Act. The order bans the use of two price tags — one indicating a "cash price" and another designating a "card price" — for the same product or service.

Section 5 of the order states that: "All retailers who honor/accept credit/ATM/debit cards for payment shall not require the cardholders to pay a surcharge, extra charge or additional charge over and above the price tag on the consumer goods and services."

The Philippine Retailers Association earlier asked the DTI to suspend enforcement of AO 10. This, after the DTI started raiding shops found blatantly violating the order.