Heavy reliance on discounting is not growth. It trains customers to wait, erodes margin and pricing power, and in Australia it is now a live legal risk with penalties of up to $100 million per breach. This piece argues Australian operators should treat perpetual discounting as a tax they can stop paying and build pricing power instead.
The price you cross out is a promise. If it has not sold at that price lately, that promise is a lie with a font.
The Take: Perpetual discounting is not a growth strategy. It is a tax you choose to pay, it teaches customers to wait for the next markdown and it strips your pricing power while you celebrate the sales spike. In Australia that habit now carries a legal cost on top of the commercial one.
A sale looks like demand. Run it long enough and it becomes the opposite. The person who bought at 30% off did not discover you. They waited for you, and next time they will wait again, because you taught them that full price is for people who are not paying attention.
I have run marketing inside a business and I have run it from the agency side, and the discount conversation plays out the same way every time. Revenue goes soft, someone floats a promotion, the promotion works, then the one-off quietly becomes the plan. A year later the "regular" price is a number hardly anyone has paid.
Why is discounting now a legal risk in Australia?
Since 28 March 2026 the maximum penalty for a single breach of Australian Consumer Law is $100 million, double the old ceiling and misleading discount pricing is squarely on the regulator's target list.
That penalty rise came in with the Treasury Laws Amendment (Doubling Penalties for ACCC Enforcement) Act 2026, which lifted the first limb of the maximum from $50 million to $100 million per contravention. The ACCC has named misleading pricing in the supermarket and retail sectors as a 2025-26 enforcement priority, and it is not a paper threat.
Maximum penalty for a single breach of Australian Consumer Law since 28 March 2026, up from $50M
The Federal Court found that Coles made false or misleading representations in 13 of the 14 "Down Down" tickets it examined, with a separate case against Woolworths over "Prices Dropped" claims covering 266 products still before the court. This is not only an Australian story. In July 2026 both Nike and Lululemon were hit with US lawsuits alleging deceptive "phantom discounts", where the crossed-out reference price was never a real selling price. One suit points to Lululemon's Wunder Train tights shown at $59 against a strikethrough of $98, a claimed saving on a price the item had not sold at since October 2025.
What does a permanent sale actually train customers to do?
It teaches them to wait. Every markdown is a small lesson in patience, and customers are excellent students. Discount often enough and your full price stops being a price. It becomes an opening bid.
There is a second cost that never shows up in the weekly sales report. Each markdown resets the reference price in the customer's head. Drop from 100 to 70 enough times and 70 becomes the anchor, so the next full price sale feels like a rip-off to the very people you trained. You have not won a customer. You have hired one, and they will leave the moment a competitor bids lower.
A discount you never switch off is not a promotion. It is your real price wearing a costume.
What we see in the businesses we score
We rate Australian businesses across six marketing dimensions, and the pattern on discounting is hard to miss. A single misleading price ticket can now cost up to $100 million, and across the businesses we have scored, the ones most dependent on markdowns cluster at the bottom on Brand and Retention. Those are the two dimensions that decide whether anyone comes back without a coupon. The operators with genuine pricing power, the ones who can hold a price and still sell, score highest overall. Discounting is not the cause of every weak score, but it travels with weakness the way smoke travels with fire.
A note on methodology and that claim. Our scores come from the New Rebellion marketing scoring model, which rates each business 0 to 100 on six dimensions using observed signals rather than opinion, benchmarked against Australian businesses in the same industry. The discount pattern above is directional, drawn from the current dataset as at July 2026, not a controlled study, so read it as a strong signal and not a law of physics. You can see exactly how the scoring works at how we score.
What I would do about it
Stop treating the discount as free. Put a real number on it. If your average order goes out at 30% off, your real margin is the spreadsheet figure minus those 30 points, every sale, forever, until you break the habit.
Then do these five things.
Set a floor price you will not go below and hold it for a full quarter. Watch what actually happens to volume. It is usually less than the fear.
Replace blanket sales with reasons. Bundle, add value, reward loyalty. Give the customer a story that is not "we panicked on Thursday".
Audit every "was" price on your site today. If the item has not sold at that price recently, the strikethrough is a legal risk, not a marketing tactic.
Move spend from markdowns into the two dimensions that build pricing power, brand and retention. A returning customer at full price is worth more than three new ones on discount.
Measure margin per order, not revenue. Revenue rewards the discount. Margin tells the truth.
This is my read, not gospel. Some businesses genuinely compete on price and do it with open eyes, and clearance has its place. But a permanent sale is not a strategy. It is a decision to pay a tax you could stop paying tomorrow. If you want to see where your own pricing power actually sits before the regulator or your margin forces the question, start with New Rebellion Hub.
Frequently asked questions
Is discounting always bad for a business?
No. Genuine clearance, launch offers and loyalty rewards all have a place. The damage comes from permanent, blanket discounting that trains customers to wait and erodes your margin and brand at the same time.
What counts as a misleading discount under Australian law?
Broadly, showing a "was" or strikethrough price the product has not genuinely sold at recently, so the saving looks bigger than it is. The ACCC has treated this as false or misleading conduct, with penalties now up to $100 million per breach.
How do I build pricing power instead of discounting?
Invest in the things that make people choose you at full price. Clear positioning, a product worth the money and strong retention. Measure margin per order rather than raw revenue so the discount habit has nowhere to hide.
Will holding my price cost me sales?
Some, in the short term. In most cases the volume drop is smaller than owners fear, and the margin you keep on every remaining sale more than covers it. Test it over a quarter before you decide.