If I were reviewing your sales process, I would want to follow one customer from the advertisement to the final invoice.
What price attracted their attention? What did they expect to receive? What additional charges appeared? When did they learn about them?
Owners usually know their pricing structure. Customers encounter it step by step. That difference deserves attention.
A Recent FTC Case Makes the Issue Concrete
The Federal Trade Commission recently announced a proposed settlement with Greenway Auto Group over allegations that its advertised vehicle prices were thousands of dollars below what customers actually paid.
The complaint alleged that mandatory fees, packages, and penalties increased prices by more than $3,350 on average in over 92% of transactions. It also alleged that some advertised prices included discounts available only to certain customers.
Under the proposed order, vehicle price advertisements would prominently include the actual price, excluding government-required charges. The order would also prohibit misrepresentations about optional charges and financing requirements. The FTC says stipulated orders take effect when a judge approves and signs them. These are allegations and proposed settlement terms, not a final court finding described here.
The case concerns an auto dealership group. My broader management question is whether your business gives customers a clear understanding of the purchase before asking them to commit.
Start With the Purchase a Customer Can Actually Make
Consider a hypothetical service advertised at $199.
Every customer must also pay a $75 setup fee and a $25 processing charge. The minimum purchase is therefore $299 before any applicable taxes.
From the owner’s perspective, each charge may have a purpose. From the customer’s perspective, the service costs $299.
I would want the business to make that total clear early in the sales process. Then I would examine whether the separate charges help customers understand the offering or simply make it harder to compare.
There can be good reasons for variable pricing. Delivery distance, project scope, installation requirements, and customer-selected upgrades can change the total.
The task is to explain what is included, what could change, and what information is needed to provide an accurate quote.
Separate Required Charges From Customer Choices
An optional service should give the customer a meaningful choice.
I would review how your team presents add-ons. Can the customer decline them? Does declining change eligibility for the advertised offer? Are employees explaining those conditions consistently?
Conditional discounts deserve the same scrutiny.
A price available only with a particular payment method, membership, contract length, or qualification can create confusion when the condition is discovered late.
Read the offer from the perspective of someone who has never purchased from you. They should be able to understand whether the advertised price applies to them.
Check Every Handoff
Pricing problems can develop between departments.
Marketing promotes one number. Sales adds the conditions. Operations identifies another required service. Billing produces the final total.
Each department may believe it is doing its job correctly while the customer receives an inconsistent explanation.
I would compare the advertisement, website, sales conversation, proposal, contract, and invoice for several recent purchases. Any difference should have an understandable reason, communicated at the appropriate point.
Then I would ask your sales and customer-service staff where customers become confused. They often know which charges require repeated explanations.
Measure the Economics of the Whole Sale
A low advertised price might attract more inquiries. Whether those inquiries create profitable business is a separate question.
Look at qualified leads, completed purchases, gross profit, cancellations, refunds, and the time employees spend resolving pricing disputes.
If an advertisement brings in people whose budgets can't support the actual purchase, your team may spend substantial time on leads unlikely to convert.
Clearer pricing could change inquiry volume. What matters is the effect on completed, profitable sales and the customer relationship.
I would test changes and measure the outcomes rather than assume either the lowest headline price or the longest list of disclosures is best.
The standard I use is straightforward: by the time a customer decides whether to buy, they should understand what they will receive and what they will pay.
I work with business owners to review pricing, margins, sales processes, and operating decisions. Learn more about my advisory work at RobertRitch.com.
Sources
The pricing example is hypothetical. The management recommendations are Robert Ritch’s analysis; the proposed settlement terms concern the defendants in the FTC case.