A reference price is the figure against which another price is judged. In retail advertising it is the higher number printed beside the one a shopper is asked to pay: the struck-through "was" price, the manufacturer's recommended price, the "typical" price or the "list" price from which a percentage saving is calculated. The concept exists because a price on its own conveys little. Twenty-nine euros is cheap or expensive only relative to something, and sellers, platforms and regulators compete to define what.

Academic research uses the term more broadly. In behavioural pricing scholarship, a reference price can be a mental standard of comparison or a posted statement of a "normal" price used to decide whether an offer is a good deal. The link between the advertised number and the benchmark in the buyer's head is what makes reference prices commercially valuable. It is also why they rank among the most heavily policed figures in marketing.

How the comparison is built and displayed

On Google's shopping surfaces the reference price travels as feed data. The price attribute carries the base price, sale_price carries the discounted figure, and sale_price_effective_date bounds the offer window. Google then decides whether to render the base price with a strikethrough. According to Google's Merchant Center Help documentation, the sale price must be lower than the base price, the discount must be greater than 5% and less than 90%, and both prices should appear on the landing page. In Australia, Brazil, Canada, France, Germany, India, Italy, Japan, Korea, the Netherlands, Spain and the UK, the base price must have been valid for 30 days within the past 200, which need not be consecutive. Elsewhere the threshold is lower: 5 days within the past 30, or 15 within the past 200. Google adds that meeting the conditions does not guarantee the annotation will show.

A German retailer lists a jacket at 80 euros from March and submits a sale price of 60 euros in June. The 25% reduction sits inside the permitted band, and the 80-euro figure has three months of history, so the strikethrough can render. Had the jacket been listed at 80 euros for only ten days before the sale, Google would show 60 euros with no comparison at all.

Structured data follows the same logic. When Google added a member pricing data type to merchant listings in February 2025, its examples separated basic prices, sale prices with strikethrough and member prices. Member prices were later removed from the primary price and sale price attributes from July 1, 2025, and routed through a dedicated loyalty attribute.

Amazon operates two reference prices. The List Price, also described as the manufacturer's suggested retail price (MSRP), is submitted by the seller. The Typical Price, defined in Amazon documentation as the median non-promotional price paid over the last 90 days, feeds the "Was - Now" display. Rules announced on March 31, 2026 require a List Price, from April 23, to match a recent price at another retailer or a price customers actually paid for the Featured Offer on Amazon. From May 18, if the Featured Offer sits below the non-promotional median on more than 45 of 90 days, promotional sales enter the median. Amazon's own example: sneakers priced at 89.99 dollars for 20 days and 74.99 dollars for 70 days acquire a Typical Price of 74.99 dollars, leaving nothing to strike through. Products without a validated reference price show no savings amount, and Prime Exclusive Discounts without one are suppressed entirely.

Merchants supply the inputs, platforms validate them and regulators judge them afterwards.

Origins and the regulatory record

The Federal Trade Commission (FTC) published its Guides Against Deceptive Pricing on November 8, 1967, now codified at 16 CFR Part 233. According to section 233.1, a former price is a legitimate basis for comparison if it was the actual, bona fide price offered to the public on a regular basis for a reasonably substantial period. The Guides illustrate the other side with a claim of "Reduced to $9.99" from a former price of $10, which they treat as misleading because shoppers expect more than a nominal cut.

Richard Thaler's paper "Mental Accounting and Consumer Choice", published in Marketing Science in summer 1985, introduced transaction utility, the value a buyer derives from the deal itself rather than from the product, measured against a reference price.

Enforcement against online marketplaces followed. On January 11, 2017, Canada's Competition Bureau announced that Amazon would pay a 1 million Canadian dollar penalty plus 100,000 towards costs. According to the Bureau, Amazon had relied on supplier list prices without verifying them, and the resulting savings claims implied prices below the prevailing market. The Bureau said Amazon's policy changes also reached amazon.com.

The European Union moved from principle to arithmetic. Directive (EU) 2019/2161, the Omnibus Directive, inserted Article 6a into the Price Indication Directive 98/6/EC, applicable from May 28, 2022. Any announced reduction must state the prior price, the lowest price applied during at least 30 days before the reduction. Member states may set different rules for perishable goods, goods on sale for less than 30 days and progressively deepening reductions. The Commission's guidance states that the provision aims to stop traders artificially inflating the reference price. On September 26, 2024, in Case C-330/23 against Aldi Sued, the Court of Justice held that a percentage reduction must be calculated from that prior price, not simply displayed next to it.

Why the figure matters to advertisers

A reference price is a performance input as much as a legal exposure. The strikethrough is the most visible element of a Shopping ad or a product detail page, and platforms award it selectively. Hadia Arif, an Amazon PPC growth strategist, wrote that listings with always-on coupons converted 15 to 20% lower once the coupon was removed, a practitioner observation rather than a measured study. Once a reference price is invalidated, Sponsored Products spend buys traffic to a weaker listing without any change to bids.

The figure also shapes offer design. Promotions exist as a separate data type partly because a code-based offer leaves the reference price intact, while a sale price overwrites it. Amazon's Business Deals require double the standard minimum discount and triple it during autumn events, measured against the same lookback. Google's 2024 minimum advertised price attribute constrains automated discounts and sale price suggestions from the other direction.

Where it fails

The persistent criticism is invention. A class action filed on January 22, 2025, alleged that Patagonia kept 16 products on continuous sale for 98 days without offering them at their stated reference prices, citing bike shorts at 83.99 dollars against 169 dollars. Mattress Firm settled a California class action over inflated original prices used between 2020 and 2024, denying wrongdoing. In Australia, the Federal Court ordered Emma Sleep entities to pay 15 million Australian dollars on April 24, 2026, after finding that 58 of 74 products had never been offered at the strikethrough price.

Standards also diverge. The FTC test turns on an undefined "reasonably substantial period". Google applies 30 days within 200 in some markets and 5 within 30 in others. Amazon uses a 90-day median. The EU demands the lowest price across 30 days. One product can therefore show a legitimate discount on one surface and none on another. Platform validation is, in effect, private rule-making.

Comparisons against a recommended retail price are a further gap. Under EU guidance they are not price reductions, so Article 6a does not constrain them, and resellers of used goods routinely measure savings against a new-item price they never charged. The effect sizes attached to strikethrough pricing are also poorly evidenced, with most published figures coming from vendors selling feed management or advertising.

Not the same as

Prior price is the EU legal term for one specific reference price, the 30-day lowest. Every prior price is a reference price; many reference prices are not prior prices.

List price or MSRP is a reference price set by a manufacturer or seller rather than observed in sales, which is why Amazon now demands external evidence for it.

Floor price in programmatic advertising is the minimum a publisher accepts in an auction. The advertising market's closest analogue to a reference price is the rate card, a public figure that transacted prices rarely match, and the logic of remnant inventory once depended on it.

Reference pricing in healthcare and procurement describes a price a large purchaser announces it will pay, such as an insurer's cap on a procedure.

Recent developments

The Australian Competition and Consumer Commission (ACCC) launched a Black Friday sweep on November 10, 2025, placed fake pricing in its 2026-27 enforcement priorities announced on February 19, 2026, and issued HSK United 79,200 Australian dollars in infringement notices in June 2026. In the United Kingdom, consumer provisions of the Digital Markets, Competition and Consumers Act 2024 took effect on April 6, 2025, and the Competition and Markets Authority opened its first investigations under them on November 18, 2025, according to law firm CMS.

Platform rules keep narrowing. Google extended loyalty pricing to 14 countries on March 25, 2026. A July 2026 update clarified that an expired priceValidUntil date can remove a sale price from search results. The next test for Amazon's revised rules arrives with Prime Big Deal Days on October 6 and 7 across 22 countries; sales during peak events are excluded from the Typical Price calculation, so the reference against which those deals are measured is set by the 90 days before them. Phantom discounts sit within the wider catalogue of dark patterns.

Timeline

  • November 8, 1967: FTC publishes the Guides Against Deceptive Pricing, later codified at 16 CFR Part 233
  • Summer 1985: Richard Thaler publishes "Mental Accounting and Consumer Choice" in Marketing Science, introducing transaction utility
  • February 16, 1998: Directive 98/6/EC on price indication is adopted
  • January 11, 2017: Canada's Competition Bureau announces Amazon's 1 million dollar penalty and 100,000 dollar cost contribution over list prices
  • November 27, 2019: Directive (EU) 2019/2161 inserts Article 6a into the Price Indication Directive
  • December 17, 2021: European Commission adopts guidance on Article 6a
  • May 28, 2022: Article 6a prior price rule becomes applicable
  • September 26, 2024: Court of Justice rules in Case C-330/23 that percentage reductions must be calculated from the prior price
  • January 22, 2025: Class action against Patagonia filed in the Southern District of California
  • February 13, 2025: Google adds a member pricing data type distinguishing strikethrough and member prices
  • April 6, 2025: UK DMCC Act consumer provisions take effect
  • July 1, 2025: Google requires member prices to move out of price and sale price attributes
  • November 10, 2025: ACCC launches a Black Friday pricing sweep
  • November 18, 2025: UK CMA opens its first DMCC Act consumer investigations
  • March 31, 2026: Amazon notifies sellers of new List Price and Typical Price rules
  • April 23, 2026: Amazon List Price validation rules take effect
  • April 24, 2026: Federal Court of Australia orders Emma Sleep entities to pay 15 million Australian dollars
  • May 18, 2026: Amazon Typical Price recalculation rule takes effect
  • June 2026: HSK United pays 79,200 Australian dollars over strikethrough pricing
  • October 6-7, 2026: Amazon Prime Big Deal Days scheduled across 22 countries

Summary

Who. Retailers, marketplace sellers and feed managers set reference prices; Google, Amazon and other platforms decide whether to display them; the FTC, the European Commission and national authorities, Canada's Competition Bureau, the ACCC and the UK CMA police them; courts, including the Court of Justice of the European Union, interpret the rules.

What. A reference price is the benchmark against which an offer is judged, usually a higher former, list or typical price shown with a strikethrough beside the selling price. In behavioural research the term also covers the internal benchmark a buyer carries.

When. US regulation dates from November 8, 1967; the behavioural theory was formalised in 1985; the EU 30-day prior price rule has applied since May 28, 2022; Amazon rebuilt its reference price validation in April and May 2026.

Where. In Merchant Center feeds and structured data, on Shopping ads and free listings, on Amazon product pages and deal badges, in retailer websites and emails, and in physical stores subject to the same pricing laws.

Why. A price means little without a comparison, and the comparison changes behaviour. That makes the reference price a conversion lever for sellers and a recurring source of deception, which is why platforms and regulators increasingly require it to reflect prices that were actually charged.