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Saudi Arabia Enacts New Consumer protection Rules for Discounts and Sales

The Saudi Ministry of Commerce has implemented nine key regulations designed to safeguard consumer rights and prevent deceptive practices during sales and discount campaigns, impacting both traditional and online retailers.

The Ministry of Commerce announced the new controls, revealed via its official account on X (formerly Twitter), to combat misinformation and protect buyers from price manipulation and misleading marketing tactics. Thes measures aim to foster a more transparent and trustworthy commercial surroundings across the Kingdom.

Licensing Requirements for Discount Campaigns

A cornerstone of the new regulations is the mandatory requirement for all commercial facilities to obtain an official license before launching any discount campaign. “No electronic facility or store is allowed to announce or execute discounts without having this license,” a senior official stated. The license must be prominently displayed, allowing consumers to verify its authenticity by scanning an attached “barcode” symbol. This proactive step aims to eliminate unauthorized sales and ensure legitimacy.

Did you know?-The barcode on the discount license allows consumers to quickly verify the authenticity of the sale, ensuring that the discounts being offered are legitimate and approved by the Ministry of Commerce.

Preventing Misleading pricing Practices

The new system explicitly prohibits attempts to manipulate prices, such as artificially inflating the original price to create the illusion of a larger discount. Retailers are now obligated to adhere to genuine offers and discounts as officially declared.

Clear and Accurate Discount Communication

To ensure clarity for consumers, commercial facilities must clearly state discount rates using a “from-to” formula – such as, “from 30% to 50%.” These percentages must be prominently displayed to avoid ambiguity. Furthermore,a price card showing both the original and discounted price is now mandatory for all products included in promotional campaigns. This procedure aims to provide a realistic comparison for consumers,enhancing confidence in pricing policies.

Reader question:-How will the Ministry of Commerce ensure that retailers accurately display the “original” price of products before a discount is applied? share your thoughts in the comments.

transparency in Policies and Guarantees

The regulations also emphasize the importance of transparently disclosing replacement and retrieval policies during promotional periods. These policies must be detailed and readily available to consumers, ensuring they are fully informed of their rights. Crucially, the new rules stipulate that discounts do not void manufacturer’s guarantees. “The reduced product is not exempt from the guarantee or technical support,” the Ministry confirmed,reinforcing the consumer’s right to quality and warranty even during sales.

E-commerce Advertising Restrictions

Strict advertising controls for e-commerce platforms are also being enforced. Electronic stores must provide accurate and up-to-date information regarding product details, pricing, discounts, and offer durations, avoiding any potential for misinformation.

Pro tip:-When shopping online, take screenshots of product pages showing the original price, discounted price, and offer duration. This can be helpful if you need to dispute any discrepancies later.

Consumer Freedom and Ethical Sales

The Ministry stressed the importance of empowering consumers with the freedom to choose without being pressured into purchasing goods within a promotional package. This prevents “forced sale” tactics and upholds the consumer’s right to buy only what they need.

These nine controls collectively establish a commercial environment built on transparency, credibility, and respect for consumer rights. They represent a vital step towards building long-term relationships between businesses and customers and fostering positive competition within the Saudi market,aligning with the kingdom’s broader goals of improving service quality and achieving consumer satisfaction.

Consumer protection Beyond discounts: Banking and Financial Services

While the recent Ministry of Commerce regulations specifically target sales and discount campaigns, it’s crucial to recognise that consumer protection within Saudi Arabia extends far beyond retail promotions. Indeed, the Saudi Arabian Monetary Authority (SAMA) plays an active role in safeguarding consumers across various financial sectors, including banking, insurance, and financial technology (FinTech). Protecting consumers in banking and financial services builds upon the foundation laid by the Ministry of Commerce, creating a more comprehensive framework for consumer rights.

SAMA’s Rulebook outlines the specific regulations for banking activities and financial conduct, with a dedicated section on Consumer Protection [[1]]. This section covers a wide range of areas, from fair treatment and transparency to complaint resolution mechanisms. SAMA’s overarching goal is to create a fair and trustworthy financial habitat for all consumers within the Kingdom.

Key Areas of SAMA’s Consumer Protection

• Transparency: financial institutions must provide clear, concise, and easily understandable facts about their products and services, including all fees, charges, and terms and conditions.
• Fair Treatment: Banks and financial service providers are obligated to treat all customers fairly and avoid discriminatory practices.
• Data Privacy: Consumer data must be protected and handled securely in accordance with established privacy regulations.
• Complaints Handling: Financial institutions must establish clear and efficient procedures for consumers to lodge complaints and have them resolved promptly.
• Accessibility: Banks must provide accessible services and information to people with disabilities.

Did you know? SAMA regulations mandate 24/7 toll-free customer service lines for banks, enabling consumers to report debit or credit cards lost or stolen at any time [[2]].

Consumer rights and Recourse

consumers in Saudi Arabia have several rights within the financial sector. These include the right to information, the right to fair treatment, the right to privacy, and the right to access redress mechanisms. If a consumer believes their rights have been violated, they can file a complaint with the financial institution.If the matter is not resolved satisfactorily, the consumer can escalate the complaint to SAMA.

SAMA’s role is essential in offering recourse when a consumer’s rights are infringed upon by a financial institution. Consumers can file complaints directly with SAMA if they are not satisfied with a bank’s or financial institution’s response.They can also seek assistance if they believe they have been a victim of fraud, mis-selling, or unfair practices.

Reader question: How does SAMA ensure financial institutions comply with consumer protection regulations?

Practical Tips for Consumers

1. Always read the fine print: Before signing any agreement, carefully review all terms and conditions, fees, and charges.
2. Keep records: Maintain copies of all financial documents, including contracts, statements, and receipts.
3. Know your rights: Familiarize yourself with your rights as a consumer of financial services.
4. Report issues promptly: If you encounter any problems, contact the financial institution immediately and keep a record of your communications.
5. Escalate if necessary: if your complaint is not resolved, escalate it to SAMA.

By understanding the consumer protection regulations by both the Ministry of Commerce and SAMA, consumers can make more informed financial decisions and protect their interests. These collective efforts emphasize the Kingdom’s commitment to promoting a fair, transparent, and customer-centric business environment.