Things to note when promoting discounts on goods and services

Note when promoting discounts on goods and services is important content that traders need to master. Understanding these regulations helps merchants avoid violating the law and organize effective promotions, ensuring safety in your business operations. The article below will detail things to note when promoting discounts on goods and services.

What is promotion?

Promotions play an essential role in a merchant’s business strategy, so merchants need to properly understand the nature of promotional activities to comply with regulations, while stimulating shopping demand, increasing sales and attracting new customers.

Currently, according to Article 88 of the Law on Commercial 2005, the concept of Promotion is clearly defined as follows: “Promotion is a trade promotion activity of traders to promote the purchase and sale of goods and provision of services by giving customers certain benefits.”

In addition, merchants carry out promotional activities in the following forms:

• Traders organize their own promotions for the goods and services they sell;
• Traders provide promotional services and carry out promotional activities for the goods and services of other traders according to a contract or agreement between the two parties.

In business activities, promotions are often expressed in many different forms, and the form of promotional discounts on goods and services is one of the most popular methods applied by merchants.

Promotional rights of traders

According to the provisions of Article 91 of the Law on Commercial 2005, subjects including Vietnamese traders, branches of domestic traders and branches of foreign traders located in Vietnam are all allowed to carry out promotional activities. This can be organized by themselves or authorized by a unit specializing in providing promotional services to do it on their behalf.

Based on Article 95 above, when conducting promotions, traders are entitled to a number of basic rights as follows:

• Actively choose the method, time, and location of the program, as well as the goods or services used for promotion.
• Have the right to clearly stipulate incentives that customers can receive, as long as they are consistent with the provisions of Clause 4, Article 94 of the Law on Commercial 2005.
• Businesses may hire a promotional service provider to implement the program on their behalf.
• Self-organize or apply forms of promotion permitted by law under Article 92, such as: giving out free samples, giving away goods or services without charge, selling goods at a discount compared to the normal price, along with many other forms that are specifically regulated.

In summary, the Law on Commercial 2005 has fully and clearly established the rights of traders in implementing promotional activities, to ensure transparency and initiative in business.

Things to note when promoting discounts on goods and services

Promotional discounts on goods and services need to comply with many strict legal regulations. Accordingly, when conducting promotional discounts on goods and services, traders should pay attention to the following to ensure healthy competition in the market and protect consumers from unfair promotional tricks:

1. Comply with the maximum discount level as prescribed:

• The discount cannot exceed 50% compared to the selling price of the goods or services immediately before the promotional period.
• Particularly for centralized promotional programs (according to Clause 5, Article 6 of Decree 81/2018/ND-CP) or trade promotion activities decided by the Prime Minister, the discount can be up to 100%.
• Discount limits do not apply to the following cases: Goods and services under the State’s price stabilization policy; Fresh food products; Goods and services during the enterprise’s bankruptcy, dissolution, or change of location or business lines.

2. No discounts on goods and services specifically priced by the State

In all cases, traders are not allowed to reduce prices if the goods or services are on the list of fixed prices regulated by the State.

3. Do not reduce below the minimum price for items within the State price bracket

If the item is in a list for which the State has prescribed a minimum price or price range, the price cannot be reduced below this minimum level.

4. It is forbidden to take advantage of promotions to dump prices

Discount activities must not be used as a way to dump the market, affecting a healthy competitive environment.

5. Limit promotional periods during the year

The total time a product or service is promoted in the form of a discount must not exceed 120 days per year (excluding centralized promotional programs or trade promotions decided by the Prime Minister).

6. Mandatory disclosure of promotional information
Before implementation, traders must transparently notify the following contents:

• Name of promotional program;
• Price after promotion and all related costs;
• Contact information of the implementing merchant;
• Time and scope of application;
• If there are conditions to enjoy promotions, the accompanying content must be clearly stated;
• Specific discount value or percentage compared to pre-promotion price.

Mastering and properly complying with these regulations not only helps traders avoid violating the law but also contributes to building reputation and trust with consumers.

CSPL: Article 7, Article 10 of Decree 81/2018/ND-CP.

Consulting service on note when promoting discounts on goods and services at Long Phan Consulting Company

Promotion consulting services at Long Phan Consulting Company provide professional solutions for promotions and discounts on goods and services for merchants. With a team of experts with extensive experience in the field of commercial consulting, we understand the complex regulations on promotions and can assist customers in building effective promotional programs.

Long Phan’s product and service discount promotion consulting services include:

• Consulting on building discount promotion programs that comply with regulations;
• Support registration procedures or notification of promotional programs with competent authorities;
• Drafting promotion program rules and related legal documents;
• Legal review of promotional programs before implementation;
• Support in resolving problems that arise during the implementation of promotional programs.

Above are some of the items that Long Phan Consulting Company provides to you when you use consulting services to note when promoting discounts on goods and services. The above service items may change depending on your specific requirements and circumstances. Please contact us immediately for detailed advice on in-depth business support service packages.

Frequently asked questions

Below are some frequently asked questions about things to note when promoting discounts on goods and services, please refer to:

Who has the authority to implement promotional programs in Vietnam?

Vietnamese traders, branches of Vietnamese traders and branches of foreign traders in Vietnam have the right to organize their own promotions or hire promotional service businesses to carry out promotional programs on their behalf, according to the provisions of Article 91 of the Law on Commercial 2005.

What basic rights do merchants possess when conducting sales promotions?

According to Article 95 of the Law on Commercial 2005, merchants conducting sales promotions have the right to choose the form, time, location and items used for the promotion; Identify specific benefits that customers will receive; hiring promotional service providers; and implementing various promotional methods specified in Article 92 of the same law.

Are there any limits on the price to which a product or service can be reduced during a promotional period?

Yes, in general, the maximum discount during the promotion period cannot exceed 50% of the price of that product or service immediately before the promotion period, according to Clause 1, Article 10 of Decree 81/2018/ND-CP. However, this limit can be up to 100% for centralized promotional programs and programs decided by the Prime Minister. Exceptions apply to price-stabilized goods/services, fresh foods, and items sold in the event of a business closure, relocation, or change of industry.

Are there situations where discounts are prohibited?

Price reduction is not allowed if the goods or services are subject to specific pricing by the State (Clause 2, Article 10 of Decree 81/2018/ND-CP) or if the price after reduction will be lower than the minimum price or floor price prescribed by the State (Clause 3, Article 10 of Decree 81/2018/ND-CP).

Is dumping through discount programs allowed?

No, taking advantage of discount programs for the purpose of dumping goods or services is strictly prohibited (Clause 4, Article 10 of Decree 81/2018/ND-CP).

What is the maximum duration of a discount promotion for a particular brand of goods or services in a year?

The total duration of promotional discounts for a specific brand of goods or services must not exceed 120 days in a year. This does not include the time to implement discount promotional programs within the framework of centralized promotional programs and programs decided by the Prime Minister (Clause 5, Article 10 of Decree 81/2018/ND-CP).

Conclude

Complying with the note when promoting discounts on goods and services helps merchants both achieve business goals and avoid legal risks. Customers who need detailed advice on building and implementing a legal discount promotion program, please contact Long Phan Consulting Company immediately via the hotline 1900636389 for professional and effective support.