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In this article, we look at what is meant by “strikethrough prices” in retail and e-commerce, why they make sense, how they work psychologically, and how the presentation of strikethrough prices can be optimized.
Disclaimer: This article does
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Is a price of 99 EUR good? In any case, it is perceived as cheaper if it stands next to a crossed-out, higher “instead-of price.” This “instead-of price” is a so-called strikethrough price, which is also often graphically crossed out. The strikethrough price serves as a reference price against which customers compare the actual price. This active communication of price advantages and rebates (price discount advertising) is also referred to as price marketing.
A saving presented in this way significantly improves the price-performance ratio perceived by customers. The perception changed by strike prices ultimately increases the probability of purchase. Since this effect is relatively strong, there could be an incentive on the part of retailers to specify an inadmissible, artificially generated strike price that is intended to influence customer behavior.
In order to avoid misleading advertising and the presentation of price reductions, the legislator has established corresponding regulations for consumer protection. These regulations can be found, for example, in the Law Against Unfair Competition
The fact that the legislator regulates the presentation of strike prices can be interpreted to mean that strike prices in price advertising have a proven effect on consumers.
The Price Indication Ordinance (PAngV) “(…) regulates the indication of prices for goods or services offered by entrepreneurs to consumers.” (Section 1 (1) PAngV). The Price Indication Regulation is the transposition of European law into national law.
The revision of the Price Indication Ordinance as of August 28, 2022, is due to the so-called EU Omnibus Directive 2019/2161 – or in its long form:
Directive (EU) 2019/2161 of the European Parliament and of the Council of 27 November 2019 amending Council Directive 93/13/EEC and Directives 98/6/EC, 2005/29/EC and 2011/83/EU of the European Parliament and of the Council as regards better enforcement and modernisation of Union consumer protection rules
A central area of regulation is the presentation of price discounts in retail and e-commerce.
The EU Omnibus Directive contains the following regulations:
“Directive 98/6/EC is amended as follows: The following article is inserted: Article 6a
(1) Any announcement of a price reduction shall indicate the prior price applied by the trader for a specified period before the price reduction.
(2) The prior price shall mean the lowest price applied by the trader during a period of time not shorter than 30 days prior to the application of the price reduction. (…)”
These regulations were implemented into German law in Section 11 PAngV (“Additional price indication obligations for price reductions for goods”) for retail and e-commerce as follows.
“(1) Any person required to state a total price shall, when announcing a price reduction for a product, state the lowest total price applied to consumers within the last 30 days prior to the application of the price reduction.
(2) In the case of a gradual price reduction of the total price of a product increasing without interruption, the lowest total price according to paragraph 1 applied to consumers for this product before the start of the gradual price reduction may be stated during the period of the price reduction.”
This means that price savings may be compared to the lowest price of the last 30 days. If the sales price is continuously reduced in stages – e.g. as part of markdown pricing – the lowest price of the last 30 days before the first price reduction stage can continue to be displayed for all subsequent reductions.
This regulation leads us to the first option of strike prices, comparison prices or (external) reference prices.
The “instead-of” price is the price displayed as the original price during a price reduction: instead of 119 EUR, now 99 EUR, you save 20 EUR (or 17%).
The PAngV requires that the lowest price of the last 30 days be displayed as a strike or comparison price for price reductions.
If a comparison price is presented as crossed out, a price reduction is generally assumed. The Federal Court of Justice has made this assessment (BGH I ZR 182/14).
What happens if the lowest price of the last 30 days is not advertised as crossed out?
The Baden-Württemberg Consumer Advice Centre has initiated a warning against Amazon and accused the online retailer of the practices in the presentation of strike prices.
In the case law of the Munich Regional Court dated July 14, 2025 (LG Munich I, Case No. 4 HK O 13950/24) against Amazon, the following judgment was rendered:”
“The defendant is ordered to refrain from offering consumers the purchase of electronic devices on the Internet by stating a percentage price reduction (“-19%”) and a strikethrough price (“€259.00”) if neither the percentage reduction nor the strikethrough price refers to the lowest total price applied by the defendant within the last 30 days prior to the application of the price reduction, but rather to a manufacturer’s “RRP”.” (Page 2)
“The defendant is further ordered to refrain from advertising to consumers for the sale of consumer electronics items with the granting of a “discount” (“19% discount”) (…), if this discount does not refer to the reduction of a total price previously charged by the defendant, but merely expresses the amount by which a manufacturer’s “RRP” is undercut (…).” (Page 3)
Amazon was threatened with “(…) an administrative fine of up to €250,000.00 for each case of culpable contravention of one of the (…) aforementioned cease-and-desist obligations (alternatively administrative detention of up to 6 weeks) or administrative detention of up to 6 months, to be enforced against the defendant’s managing director.” (Page 4)
Conclusion: Strike prices and price reductions in retail and e-commerce must refer to the lowest price of the last 30 days before the advertised price reduction.
What role does the Manufacturer’s Suggested Retail Price (MSRP) play? The MSRP refers to a non-binding price recommendation from the product manufacturer for retail and e-commerce.
Comparing a price with an RRP is still possible and is referred to as an “external price comparison,” as long as the presentation of the price comparison cannot be understood as a price reduction. The aforementioned Amazon ruling states in this regard:
“It must be assessed on the basis of the specific design of the advertisement whether, according to consumer perception, it presents itself as a mere external price comparison or as an announcement of an internal price reduction or a combination of both.
Based on the relevant circumstances of the individual case here, it must be assumed in all three contested cases that the advertisement is part of a presentation designed as price reduction advertising and is understood accordingly by the reference consumer.” (pp. 7-8)
Conclusion: A price can be compared to the MSRP, provided that no price reduction is inferred.
When customers and consumers look at a price, they compare this price with their price perception for a reasonable price. This price perception is also referred to as the internal reference price.
If the price on the price tag is above the internal reference price, the price is perceived as high or expensive. If the price is below it, it is perceived as cheap or inexpensive.
However, we as consumers find it difficult to assess a price without a direct comparison. We humans cannot assess sizes expressed in numbers – such as prices – so well individually. We are better at evaluating these sizes relative to something else.
This is where so-called external reference prices come into play, which are presented to the customer and serve as a benchmark. These external reference prices are, for example, the lowest price of the last 30 days or the Manufacturer’s Suggested Retail Price (MSRP).
These external reference prices influence price perception in two ways.
First, customers perceive this external reference price and compare it with the internal reference price. If the external reference price is credible, it raises the internal reference price, so that the assessment of what is a reasonable price increases. This is an example of displaying the MSRP. The opposite is the case if the external reference price is lower than the internal reference price: Customers then expect a lower reasonable price.
Second, customers infer a perceived saving from the difference between a higher external reference price and a lower current price. This perceived saving has a value in itself from the customer’s point of view. You are not only happy about the product you bought, but also about the saving – in this case, we speak of an additional transaction benefit.
How can this perceived saving be influenced by presenting your own price with a comparison price? This is a topic of price psychology.
The following explanations also apply to actual price reductions as part of a discount campaign. However, in the following, we assume that you have had a good price for more than 30 days, but are not planning any further price reductions. Nevertheless, you would like to point out this objectively good price to your customers. Your selling price (VKP) is significantly below the Manufacturer’s Suggested Retail Price (MSRP) of the manufacturer.
What psychological principles should you consider when presenting your price information?
If you would like to speak to an expert about your price communication without obligation, please arrange a meeting with us.
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