Strikethrough pricing—the practice of showing a “regular” or “original” price alongside a discounted price—is one of the oldest and most effective psychological pricing tactics in retail. It evokes urgency, reinforces perceived value, and nudges shoppers to take action. But in today’s regulatory climate, this simple visual cue can become a legal liability if misused.
In recent years, states within the U.S.—and California in particular—have stepped up enforcement of strikethrough pricing practices. One rule that’s gaining attention is the 90-day MSRP (Manufacturer’s Suggested Retail Price) threshold. Retailers and brands operating in California now face stricter requirements about when and how they can display original prices.
In this post, we’ll unpack:
- What the California strikethrough pricing rule actually says
- Who it applies to and why it matters across the U.S.
- Real examples of lawsuits and regulatory actions
- How retailers and DTC brands can stay compliant
- Why having the right dynamic pricing platform—like Quicklizard—is key to minimizing risk and maximizing flexibility
What Is the California Strikethrough Pricing Rule?
The California rule centers around the concept of “former price advertising.” According to California Business and Professions Code 17501:
“…the worth or value of an item advertised as a former price shall mean the prevailing market price…within three months immediately preceding the publication of the advertisement.”
In plain terms: if you advertise a strikethrough price (for example, $99 crossed out next to $59), that “original” price must have been the actual, prevailing price within the past 90 days.
If it hasn’t been offered at that price in the last 90 days, then you must disclose the date when that higher price was last in effect.
The rule aims to protect consumers from misleading discount claims — such as inflating the original price to exaggerate the perceived deal. And while it’s a California-specific regulation, its impact is national.
How is Strikethrough Pricing Regulated Beyond California?
The regulation of strikethrough pricing isn’t limited to the U.S.—Europe has also taken steps to improve price transparency for consumers. The EU Omnibus Directive, which came into effect in May 2022, requires that any price reduction display must indicate the lowest price applied during the previous 30 days. This rule applies to all sellers operating within the EU, both online and offline, and aims to prevent artificial price inflation prior to promotional periods. While the time window is shorter than California’s 90-day rule, the intent is similar: to ensure consumers aren’t misled by inflated “original” prices. For global retailers, these overlapping yet differing standards create a strong case for region-specific pricing strategies and compliance automation.
Who Does the 90-Day Rule Apply To?
Any business, whether an online retailer, a brand selling DTC, or a marketplace, that sells to consumers in California is potentially subject to this rule.
It doesn’t matter where your business is headquartered. If California consumers can purchase from your business, compliance is required.
This includes:
- National and international retailers with websites serving California
- DTC brands running targeted ads in California
- Omnichannel retailers with stores or e-commerce fulfillment in California
Given the size and purchasing power of the California market, most large retailers effectively treat these rules as national standards to reduce compliance complexity.
What Are the Risks of Non-Compliance?
California’s consumer protection laws have teeth. Misleading pricing practices, even unintentional ones, can result in class action lawsuits, civil penalties, reputational damage, and forced changes to pricing strategies.
Here are a few notable examples:
1. Amazon (2021)
California filed a lawsuit against Amazon, accusing the eCommerce giant of displaying deceptive reference prices on its product listings. The complaint alleged that Amazon showed inflated list prices to exaggerate the size of discounts. While the company denied wrongdoing, the case underscored regulators’ increasing scrutiny of online discounting practices.
2. Overstock.com (2014)
The State of California won a $6.8 million judgment against Overstock for using arbitrary list prices in strikethroughs, which the court ruled were not based on actual prices the items were sold at. This was one of the earliest and most publicized enforcement cases involving 17501.
3. J.C. Penney, Macy’s, and Kohl’s (2015–2020)
These major retailers faced lawsuits alleging deceptive pricing practices, such as displaying “original prices” that were never actually used. Several cases resulted in settlements, requiring retailers to update their pricing display practices and pay millions in penalties.
What Are the Common Pitfalls Retailers Make?
Retailers and brands often run into trouble with the 90-day rule due to:
- Using MSRP as a reference price when the product was never actually sold at that price within the last 90 days.
- Running “permanent promotions” where the “sale” price is in effect for months, and the original price is more fiction than fact.
- Failing to update or remove strikethroughs after the 90-day window expires.
- Not applying rules at the SKU level, resulting in inconsistencies across regions or product variations.
Even with good intentions, these mistakes can create legal exposure, especially as state attorneys general and consumer watchdog groups become more proactive.
What Are The Best Practices for Staying Compliant?
To minimize risk and ensure compliance, retailers should adopt several key practices:
1. Track historical prices at the SKU level
Know exactly when and where a product was sold at its original price. This requires robust data infrastructure and pricing transparency.
2. Limit “original” price displays to the last 90 days
Unless you’re willing to show a specific date (e.g., “Regular price as of Jan 10”), the crossed-out price must be the actual prevailing price from the past three months.
3. Avoid inflated or arbitrary MSRPs
If the manufacturer’s suggested price has never truly been the market price, don’t use it in strikethroughs. It can be used for reference, but not as a fake discount anchor.
4. Review pricing display logic in marketing platforms
Ensure automated emails, product pages, and ads are all dynamically pulling current, accurate pricing data—not outdated “original” prices.
5. Build internal guardrails
Create automated checks to prevent old reference prices from appearing after 90 days, or require human approval for certain promotional tactics.
How Can Quicklizard Help Retailers Navigate the 90-day Pricing Rule?
Quicklizard is an AI-powered dynamic pricing platform built for modern retailers and DTC brands. It allows you to set, adjust, and govern pricing at the SKU level, in real-time, while ensuring regulatory compliance through advanced rule-based guardrails.
Complying with this regulation, especially at scale, isn’t just a legal or marketing challenge. It’s a pricing infrastructure challenge.
Here’s how Quicklizard can help:
- Track and log every historical price for every SKU—including when and where a specific price was in effect.
- Create automated pricing rules that remove strikethroughs or require disclosures when a price exceeds the 90-day threshold.
- Build SKU-level compliance strategies by treating each region (such as California, other U.S. states, or international markets) as a separate pricing channel, each with its own display rules and regulatory requirements.
- Create strategic price uplifts by temporarily raising a product’s price in compliance with regulations, so future discounts can reference a legitimate higher price, enabling effective and lawful strikethrough pricing.
- Apply AI modules like article segmentation to identify where it makes sense to keep prices low and steady, versus where to strategically uplift prices — enabling future discounts to reference a legitimate higher price.
Whether you’re a global retailer managing tens of thousands of SKUs or a fast-scaling DTC brand expanding into regulated markets, Quicklizard enables you to scale your pricing strategy without scaling your risk.
Final Thoughts
Discount pricing is a powerful conversion tool, but only if it’s done right. The 90-day rule in California is just one example of how pricing strategy and compliance are becoming inseparable in the digital retail era.
Retailers need systems that not only automate pricing, but enforce guardrails, provide transparency, and adapt to regional regulations in real time.
With Quicklizard, you don’t need to choose between speed and safety. You get both, along with the flexibility to customize every pricing strategy to your business goals and legal requirements.
