Bureau Home / Trade Practices / Unfair Sales Act
Commonly referred to as the "Minimum Markup Law," the Unfair Sales Act prohibits selling items of merchandise below cost. The law states that "the practice of selling [...] below cost to in order to attract patronage is generally a form of deceptive advertising and an unfair method of competition in commerce." See Wis. Stat § 100.30, the Unfair Sales Act and Wis. Admin. Code ch. ATCP 105, Sales Below Cost.
Common exceptions that permit sales below cost include [refer to Wis. Stat. § 100.30(6) for a complete list of exceptions]:
- Meeting the existing price of a direct competitor
- Clearance and final liquidation sales
- Sales of damaged or perishable merchandise
- Contracted sales to government institutions
- Sales for charitable purposes or to relief agencies
When retailers, wholesalers, wholesalers of motor vehicle fuel, or refiners lower their motor vehicle fuel prices in good faith to meet the price of a direct competitor, they must file a notice of meeting competition form with the Wisconsin Department of Agriculture, Trade and Consumer Protection (DATCP).
Penalties for violating the Unfair Sales Act may include a civil forfeiture of $50 to $500 for the first violation and $200 to $2,500 for each subsequent violation. Sellers of motor vehicle fuel and/or tobacco products may file a private cause of action to seek damages if they are injured by a competitor's price.
How is Cost Defined?
In general, wholesale and retail cost for all merchandise includes the lower of invoice cost or replacement cost, less all trade discounts, plus any excise taxes and any cost incurred for transportation and any other charges not otherwise included in the invoice cost or replacement cost of the merchandise. For complete statutory definitions of cost, refer to Wis. Stat § 100.30(2).
For alcohol and tobacco products:
The cost of doing business also includes a markup of 3% for wholesalers or 6% for retailers.
Wholesalers who operate retail outlets, retailers who purchase directly from the manufacturer, or persons holding a permit as a multiple retailer as defined in Wis. Stat. § 139.30(8) selling cigarettes and other tobacco products, must include a 9.18% markup (3% plus 6% compounded).
For cigarettes and other tobacco products sold at wholesale by a person holding a permit as a distributor as defined in Wis. Stat. § 139.30(3), trade discounts from manufacturers must be disregarded when calculating cost. [Wis. Stat. § 100.30(2)(c)1.b.]
For retail sales of motor vehicle fuel, the definition of cost is:
The statutory definition of cost for retail sales of motor vehicle fuel is the greater of either invoice or replacement cost (as noted above) plus a cost of doing business markup of 6%, or the “average posted terminal price” plus a cost of doing business markup of 9.18%. (Refer to Motor Vehicle Fuel Cost Calculator.)
The statutory definition of cost for wholesale sales of motor vehicle fuel includes a cost-of-doing-business markup of 3%.
Motor Vehicle Fuel Fraudulent Representations
Refer to Wis. Stat. § 100.18(8).
- At each retail place of business, a price must be posted in a conspicuous place "most accessible to the public," as well as on every fuel pump.
- Once a price has been posted, it must remain in effect for at least 24 hours.
- It is considered deceptive advertising to advertise, or represent in any manner, the price of motor fuel offered for sale at retail that is less than the price posted on each pump.