This memorandum aims to provide a brief analysis of the legal implications of discounted sales and loss sales.
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Government Ordinance 99/2000 on trading of products and market services (“GO 99/2000”);
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Methodological Norms from 2003 for the application of Government Ordinance 99/2000 on trading of products and market services (“Application norms of GO 99/2000”);
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liquidation sales;
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clearance sales;
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sales made in sales structures called factory store or factory warehouse;
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promotional sales;
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sales of products that meet occasional needs of consumers, after the event has passed and it is obvious that the products can no longer be sold under normal commercial conditions;
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sales of stock unsold for 3 months from supply;
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accelerated sales of products that are susceptible to rapid deterioration or whose preservation can no longer be ensured until the expiry date;
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sales of products at a price aligned with the legal price practised by the other traders from the same commercial area, for the same product, determined by the competitive environment;
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sales of products with identical characteristics, whose replenishment prices have decreased.
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Clearance sales are any sales accompanied or preceded by advertising and announced as „clearance“ and which, through a price reduction, have the effect of accelerating sale of the stock of seasonal goods in a retail sales structure. Please note that clearance sales can only include the stock of new or used / seasonal goods from a retail structure that is preceded or accompanied by advertising. Examples of seasonal stocks are product groups such as, but not limited to: clothing, including fur, leather, haberdashery, knitwear, fabrics, footwear, sporting goods, cosmetics and other similar products.
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Promotional sales are retail sales / cash & carry sales / market services that can take place at any time of year and can be freely performed by traders without any prior notice being required.
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sales are to be made at a reduced price, but not at a loss;
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sales should refer to available or interchangeable products and services sold or, if applicable, performed on a permanent basis.
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advertised products and services must be offered for sale throughout the advertised sales period or the trader must inform consumers that the offer is valid only within the limits of available stock.
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the actual reduction in relation to the reference price, which is the lowest price charged in the same sales territory for identical products or services during the 30 calendar days preceding the date of application of the reduced price.[ii]
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the products or services or categories of products or services to which the advertising relates
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the period for which these products or services are offered at a reduced price; in the case of liquidations and clearance sales, this condition may be replaced by the words „while stocks last“. This declaration may also be used for advertising sales.
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either by mentioning the new price next to the previous one, crossed out;
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or by the words “new price”, “old price” next to the corresponding amounts;
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or by specifying the discount percentage and the new price that appears next to the previous one, crossed out.
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sales at a global price for different products or services forming an assembly as well as for identical pre-packaged products offered in a collective package, provided that each product and service can be purchased separately at the same price in the same sales area and provided that the buyer is informed of this possibility and of the sales price of the product or service.
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sales of products in batches or packaging consecrated by commercial customs and consumer needs.
[i] We reproduce in the following the deliberations of the Court in decision no. 11761/2017 27-10-2017: „whereas on April 11, 2017 in Piata Unirii no. 1 floor 3 (the trader […]) performed retail sales of clothing and footwear where clearance sales were carried out without notifying the town hall of District 3 Bucharest (sales are below the purchase price). […] The Court finds that the petitioner (the trader) has not proved that she did not carry out a clearance sale in the sense of Art. 22 GO 99/2000. The advertising submitted in the file is unlikely to invalidate the presumption of the accuracy of those provided in the handover minute. The campaign ad poster states that one product can be bought and the second can be bought at half price, respectively that two products can be bought and the third product will be free. At the end of the advertisement it is stated that this discount applies to the product with the lowest value. Therefore, the petitioner has carried out a sale with advertising which, by reducing the price, accelerates the sale of the stock of seasonal goods in a retail structure. The fact that the campaign ad poster does not mention the term „clearance sale“ does not allow the conclusion to be drawn that the petitioner did not in fact carry out this form of sale, but rather that the petitioner did not want to place them in this category in order to fulfil the formalities required by law, namely the notification of the town hall. Thus, in the meaning of art. 22 of GO 99/2000 – A clearance sale is any sale (…) and is announced under the name „clearance“. However, if the activity carried out causes the effects of such a sale, but is not declared as such, it can not be considered that it no longer has this title and the procedures imposed by law do not have to be fulfilled.
[ii] With regard to the reference price, Brasov Tribunal by way of the Decision 2630/2018 stated that even in the case of successive price reductions, there is only one reference price, which is calculated and taken into account when applying the first reduction. Therefore, a second reduction cannot take into account the reduced price, but the same reference price, since a contrary interpretation would violate the provisions of the law, according to which advertising sales are not to be made at a loss.