What is a recommended price?
A recommended retail price is a price set by the producer or official importer that serves as a guide price or reference price for a product. This price offers retailers and other sellers a suggestion for what they can charge for the product, but they are free to deviate by applying a higher or lower price.
Example:
In many discount promotions, the recommended retail price is stated as a reference to indicate how much discount is being given. However, this can be misleading if the stated recommended retail price does not correspond to the actual prevailing retail price. This happened, for example, in a case where webshops such as bol.com and Coolblue were accused of stating larger discounts than were actually given by using incorrect recommended retail prices.
Similar terms:
- Maximum price: The highest price legally permitted for a product.
- Price cap: A maximum price set by the government or a regulatory body.
- Fixed book price: A legally determined price for books, which sellers are not allowed to deviate from.
- Indicative price: An expected opening price of a share, based on orders before the stock exchange opens.
The concept of recommended retail price plays an important role in both retail and the securities trade, where it serves as a guide or benchmark for establishing prices or rates.