Reference Price

Definition

A reference price is the higher price shown next to a current price, such as “was” or “list price”, to suggest a saving. It is a claim made by the seller, not necessarily a price at which the item was ever sold, so it should be recorded as a separate field and never mistaken for the current price.

In plain terms

Shoppers judge a price against a reference point, which is why sellers show one. Consumer-protection guidance in several countries, such as the United States’ Guides Against Deceptive Pricing, says that a comparison with a former price should be genuine. For data work the lesson is practical: a price display contains several numbers, and a pipeline must know which is which.

Keep at least the current price, the reference price (if any) and the unit price as separate fields, each with its currency and whether tax and shipping are included.

Example

A product page shows: 25.00, struck-through 33.33, “save 25%”.

A collector that mistakenly stored 33.33 as “the price” would be 33% too high on every product that is on offer (33.33 / 25 = 1.33), and the error would be invisible in a single day’s data.

Common misunderstandings

• “The reference price is what it normally costs.” It is what the seller chose to display; whether it was ever charged is a separate question.
• “A displayed discount proves the price fell.” The reference may be old, inflated or arbitrary.
• “One price field is enough.” At least current, reference and unit price need to be kept apart.