To attract customers in the first sale or boost sales, businesses use a method called promotion. However, many businesses do not understand the law, decide to reduce prices to 70%, 75%, or even 80% without even knowing they are violating the law on unfair competition. So what is the law on promotion?
Legal grounds
– Commercial Law 2005
– Decree 81/2018/ND-CP
Consulting content
What is Promotion?
A promotion is a discount to a customer when he purchases a product at a lower price than the original price. Commercial Law 2005 Article 88 provides a legal definition as follows:
Article 88. Promotions
1. Promotion means a trade promotion activity of a trader aimed at promoting the purchase and sale of goods and provision of services by giving customers certain benefits.
How much is the promotion rate according to the law?
For businesses, the maximum discount is 50%, the level of 100% is decided by the Prime Minister according to Article 7 of Decree 81/2018/ND-CP. Thus, Black Friday is only discounted up to 50%, which is the last reduction by the law and also the highest discount of the year.
Maximum discount for promotional goods and services
– The maximum discount for promotional goods and services must not exceed 50% of the price of such goods or services right before the promotion 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 shall 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.
Similarly, for corporate gifts, the promotion cannot exceed 50% of the value of the order, goods, or services being promoted. In case of promotion worth 100%, it must prescribe by the Prime Minister in the form of the hour, day, week, month, and season of promotion to implement targeted economic development policies of the country and localities. specifically in Article 6 of Decree 81/2018/ND-CP.
Maximum limit on the value of goods and services used for promotion
– The material value used for promotion for a promotional unit of goods or services must not exceed 50% of the price of such promoted goods or service unit before the promotion period, except in the case of promotion. trade by the forms specified in Clause 8, Article 92 of the Commercial Law, Article 8, Clause 2, Article 9, Article 12, Article 13, Article 14 of this Decree.
– The total value of goods and services used for promotion that a trader performs in a promotion program must not exceed 50% of the total value of the promoted goods or services, except for the case of sales promotion using promotion. the form specified in Clause 8, Article 92 of the Commercial Law, Article 8, and Clause 2, Article 9 of this Decree.
etc.
– In the case of organizing concentrated promotional programs (hour, day, week, month, promotion season), the maximum limit on the value of goods and services used for promotion shall be 100%. . The maximum limit on the value of goods and services used for 100% promotion also applies to promotional activities within the framework of trade promotion programs and activities decided by the Prime Minister.
The concentrated promotion program by the law includes:
So, The program chaired by state agencies (central and provincial levels) and organized, within a definite period, in the form of hours, days, weeks, months, and promotional seasons to implement development policies. national and local economic objectives. The State has policies to encourage the organization of concentrated promotional programs. Every trader is entitled to participate in the programs;
Thus, to avoid the risk of legal problems for newly established businesses, and at the same time healthy competition, you should learn carefully before offering promotions.
Related article:
How to understand trade promotion correctly according to the Vietnamese view?
Forms of trade promotion in accordance with the law of Vietnam
Frequently asked questions:
To be able to extend the promotion program, traders need to apply to the registration agency as follows:
– Submit 01 application for registration by post to the competent state management agency.
– Submit 01 application for registration directly at the headquarters of the competent state management agency.
Using the online public service system provided by competent state management agencies.
Note: The extension of the promotion program must ensure that it does not affect the interests of customers who participated in the program before the program was modified; additional content.
– For the announcement of the promotion program: 3 working days from the date of receipt of valid documents
– For registration of promotion program Department of Industry and Trade: 7 working days from the date of receipt of valid application
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