Sale up to 70%” violates the law on the promotion of goods. How does the law regulate the promotion of goods and services?
Here, together with the business law consulting rooLsxlawfirmm of Lawyer X will clarify this issue.
Legal grounds
Commercial Law 2005.
Decree 81/2018/ND-CP.
What is Promotion?
Under Article 88 of the Commercial Law 2005:
Promotion means trade promotion activities of traders to promote the purchase and sale of goods; provide services by giving customers certain benefits.
Traders conducting sales promotion are traders in one of the following cases:
▪ Traders directly promote goods and services that they trade;
▪ Traders engaged in the business of providing promotion services conduct sales promotions for goods; services of another trader according to an agreement with that trader.
Thus, only traders allowed to participate in goods promotion activities. A trader can directly promote goods and services by himself. In addition, traders can also provide promotional services; conduct sales promotions for goods and services of other traders as agreed by the parties.
Is it illegal for fashion stores to “sell up to 70%” in promotions?
Article 7 of Decree 81/2018/ND-CP stipulates the discount rate for goods; services as follows:
The maximum discount for promotional goods and services must not exceed 50% of the price of the goods; the service is right before the promotional period.
In the case of organizing concentrated promotional programs (hours, days, weeks, months, sales seasons) according to the provisions of Clause 5, Article 6, the maximum discount for goods and services will be applied. The promotion is 100%. The maximum discount rate of 100% also applies to promotional activities within the framework of trade promotion programs and activities decided by the Prime Minister.
The maximum discount limit does not apply when performing a discount promotion for:
– Goods and services when implementing the State’s price stabilization policy;
– Fresh food products;
– Goods and services in case the enterprise goes bankrupt, dissolves, changes location, production, and business lines.
Thus, according to the provisions of law, traders participating in promotions can only reduce the price of no more than 50% of the price of the product before the promotion. There are only cases of participating in concentrated promotions according to the decision of the Prime Minister.
So whether fashion stores are breaking the law.
If considered according to the law with the sale price that the stores often announce like that, the stores are violating the law on promotion. However, in reality, in some ways, the promotional activities of stores are legal. The store’s sale level is up to 70%, but that level only applies to some of the goods in the store’s merchandise. This makes the operations of the stores legal.
There is another fact that the selling price of goods did not fix, most stores often do online business, which makes it difficult to realize that the 70% sale price is a 70% discount compared to the actual price. The economy of that good or not.
Article see more.
Trademark registration under Vietnamese legislation
In Vietnam, is there any promotion of alcohol?
Prohibited acts in promotional activities.
– The following acts prohibited in commercial activities:
– Promotion for goods and services banned from business; goods and services for which business is restricted; goods not yet allowed to circulate, services not yet permitted to be provided.
– Using products for promotion prohibited from trading; goods and services for which business is restricted; goods not yet allowed to circulate, services not yet allowed to be provided.
– Promotion of the use of alcohol or beer for promotion for people under 18 years old.
– Advertising of the use of tobacco and alcohol with an alcohol content of 15 degrees or more for promotion in any form.
– Advertising that are dishonest or misleading about goods and services deceives customers.
– Publicities of consumption of poor quality goods, are harmful to the environment, human health, and other public interests.
– Promotions at schools, hospitals, headquarters of state agencies, political organizations, socio-political organizations, people’s armed forces units.
– Promised gifts or rewards but did not perform or performed improperly.
– Promotions are aimed at unfair competition.
Frequently asked questions.
Promotional service contracts must be made in writing or another form with equivalent legal validity.
Under Article 5 of Decree 81/2018/ND-CP, Money can be used as goods and services for promotion. Except for cases where it cannot be used for promotion by law.
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