Etsy Sale Price Rules 2026: Fake Discounts

You set a necklace at $48, ran it there for a fortnight, then pushed it to $72 on the Thursday before a long weekend and switched on a 33% sale. Etsy drew the strike-through, added the badge, and the listing told every visitor the piece normally sells for $72. The shop had its best weekend of the quarter.

That is the exact fact pattern the Federal Trade Commission uses as its own worked example of an illegal sale, and it has been in print since 1964. The Etsy sale price rules that matter are not really Etsy's: they are four separate layers, three of them with teeth, and the one every guide warns you about is the only one that cannot fine you. We read all of 16 CFR part 233, pulled California's pricing statute out of a class action filed this April, and checked what the Court of Justice did to the 30-day rule in 2024.

Here they are in the order they reach a shop, with the thresholds each one actually sets.

What Your Sale Badge Promises the Buyer

A discount on Etsy is not one claim. It is three or four stacked on top of each other, and each one is independently capable of being false. Sellers tend to think of the sale as a single decision about a percentage; the law reads every element on the card separately.

What the listing shows	The claim a buyer reads	What has to be true
Crossed-out higher price	This is what the item normally costs here	You offered it at that price, openly and regularly, for a substantial period
Percentage off	The saving is this large	The percentage is computed from that genuine former price
"Sale" with no figures	The reduction is worth noticing	The cut is not "so insignificant as to be meaningless"
Countdown or "ends soon"	The price goes back up shortly	You intend to restore it, and do
Comparison to other shops	Others charge more for this	Substantial sales are being made elsewhere near that price

Two rows there are unusual. The countdown is a representation about the future, easy to break by accident: a sale you keep extending falsifies the urgency you already sold. And the comparison row catches handmade sellers hardest, because it asks about a market that often does not exist for a one-off piece.

Everything below is about whether those statements hold, not about whether your price is fair.

The FTC Rules on Fake Sales Are Guides, Not a Rule

Start with the thing every article on this subject gets wrong. 16 CFR part 233, the Guides Against Deceptive Pricing, is not a trade regulation rule. 16 CFR 1.5 defines what it is: "Industry guides are administrative interpretations of laws administered by the Commission for the guidance of the public in conducting its affairs in conformity with legal requirements." The same section adds that failure to comply "may result in corrective action by the Commission under applicable statutory provisions".

That phrasing matters. A trade regulation rule carries civil penalties per violation; a guide carries the Commission's reading of section 5, so an action has to be built on deception rather than on the guide itself. Compare the review rules in Etsy Review Rules 2026, where part 465 is a rule and the penalty figure is printed in the regulations.

The Guides sit in part 233 of title 16, and four tests inside them do the work.

Section	Test	The standard in its own words
233.1(a)	Your own former price	"the actual, bona fide price at which the article was offered to the public on a regular basis for a reasonably substantial period of time"
233.1(b)	Whether anyone bought at it	"not necessarily fictitious merely because no sales at the advertised price were made" - but it must have been "openly and actively offered for sale"
233.1(e)	Size of the cut	not "so insignificant as to be meaningless"
233.2(a)	Comparison to other sellers	the higher price must not "appreciably exceed the price at which substantial sales of the article are being made in the area"

233.1(b) is the generous one and the one sellers misread in their own favour. You do not need a sales record at the higher price. You do need to have offered it there "in the recent, regular course of his business, honestly and in good faith". The Guides then close the loophole: avoid any implication that the former price was a selling rather than an asking price, as with wording like "Formerly sold at $___", unless substantial sales at that price were actually made.

So "nobody bought it at $72" is not the defence. "I never really offered it at $72" is the admission.

The Pen Example Is Your Shop's Sale Calendar

The Commission wrote its own illustration into 233.1(c), and it is worth quoting because it is the necklace story with the serial numbers filed off. A retailer buys pens at $5 and normally sells them at $7.50. To set up a bargain he lists them at $10, knowing he will sell few or none, holds that for a few days, then cuts back to his usual $7.50 and advertises: "Terrific Bargain: X Pens, Were $10, Now Only $7.50!" The Guides' verdict is one sentence: "This is obviously a false claim."

233.1(d) then lists the variations, and three of them are ordinary shop habits rather than schemes. A price "not used in the recent past but at some remote period in the past, without making disclosure of that fact" - the price from 2024 you still cross out. A price "not openly offered to the public" - the figure that only ever existed in a draft listing. And a price "not maintained for a reasonable length of time, but was immediately reduced", which is the Thursday-before-the-weekend manoeuvre exactly.

233.5 sweeps up the rest with a line that reaches two things Etsy sellers do without thinking: do not run "an advance sale under circumstances where they do not in good faith expect to increase the price at a later date", and do not "make a 'limited' offer which, in fact, is not limited". A rolling countdown is both at once.

California Is Where These Cases Get Filed

Here is the part that changes how you should weigh all of the above. Secondary commentary consistently reports that the FTC has not brought a reference-pricing enforcement action under the Guides in decades, some of it putting the last one in the Nixon administration. We could not confirm that against a primary source and so do not assert it; what is checkable is where the Commission's pricing attention actually went in 2026, which was a proposed enforcement policy statement on personalized pricing issued on 19 August 2026, still only proposed and out for comment. The federal fee rule that took effect on 12 May 2025 does not help either way: it covers live-event ticketing and short-term lodging, and reaches no marketplace listing.

The enforcement that does happen is private, and it happens in California, because California converted the FTC's "reasonably substantial period" into a number. Business and Professions Code 17501 provides that no price may be advertised as a former price unless that price was the prevailing market price in the locality within the three months immediately preceding the advertisement, or unless the date when the former price did prevail is clearly, exactly and conspicuously stated in the advertisement.

Note the two escape hatches, because the second one is free. You can advertise an older former price if you date it. "Was $72 in June 2026" asks nothing of the three-month window.

Worth flagging a disagreement in the sources rather than smoothing it: much of the commentary describes 17501 as a 90-day rule, and the statutory wording is "three months". Those are not the same count, and the complaint discussed below uses both in different paragraphs. Three months is the statute; treat 90 days as shorthand.

17501 on its own is only a definition. It becomes money through three other statutes: the False Advertising Law at 17500, the Unfair Competition Law at 17200, which makes a violation of another statute an "unlawful" business practice, and the Consumers Legal Remedies Act. The CLRA is the one to read twice, because Civil Code 1770(a)(13) declares unlawful "making false or misleading statements of fact concerning reasons for, existence of, or amounts of price reductions" - a provision written for precisely this - and Civil Code 1780 awards attorney fees.

Morgan v. Best Buy, Read as a Checklist

Those statutes are not theoretical. Morgan v. MN Best Buy Co., Inc., No. 8:26-cv-00836, was filed in the Central District of California on 6 April 2026. It is a putative class action over "Reg", "Regular" and "Comp. Value" reference prices and the "Save $X.XX" badges derived from them, pleading the False Advertising Law, the UCL and the CLRA, with a jury demanded and restitution, actual and punitive damages, an injunction and fees sought.

Read as a seller rather than as a defendant, four of its allegations describe decisions an Etsy shop makes in an afternoon.

What the complaint alleges	The Etsy habit it maps onto
Reference prices that "never reflected the genuine prevailing retail price" for the statutory window	A crossed-out price you set when you listed the item and never charged
A reference price unchanged for fourteen months while actual transaction prices fell, called "a permanent fictional anchor"	A listing that has carried the same strike-through since 2024
"Comp. Value" claims for a private-label brand sold only through the defendant and one partner, said to be "inherently false because no retailer in the marketplace charges" that price	"Compare at" or "retail value" on an item only your shop makes
"Save" amounts "equally fictitious" because they are arithmetic on a false reference price	The percentage badge Etsy computes from whatever base you typed

The private-label allegation is the one handmade sellers should take personally. Best Buy's exposure there is not that its own former price was wrong; it is that a comparable value claim cannot be true for goods nobody else sells. That is 233.2(c)'s "like grade and quality" test, and almost every one-of-a-kind listing fails it by construction. The safe move is not a smaller comparison figure. It is no comparison figure at all.

Ship to the EU and the Test Becomes a Number

If your shipping profiles include the EU, a fourth layer applies and it is the only one that replaces judgement with arithmetic. Article 6a of the Price Indication Directive, added by the Omnibus Directive and in force since 28 May 2022, requires any announcement of a price reduction to state the prior price, and defines that prior price as the lowest price the trader applied during a period not shorter than 30 days before the reduction.

Two consequences sellers miss. Earlier promotions count: a flash sale inside the window sets the floor, so last month's discount becomes this month's reference price. And a longer look-back is always safe, because quoting a prior price lower than the 30-day low breaches nothing.

The Court of Justice tightened it in Case C-330/23, decided 26 September 2024 on a reference from the Dusseldorf Regional Court, brought by Verbraucherzentrale Baden-Wuerttemberg against Aldi Sued over weekly brochure "price highlights" on bananas and pineapples. Aldi had calculated its percentages from the price immediately before the promotion. The Court held that a reduction, whether expressed as a percentage or as promotional wording highlighting how advantageous the offer is, must be calculated from the 30-day low - and that printing that low in the fine print does not cure a headline built on a higher figure.

	United States	European Union
What the reference price must be	A bona fide price you openly offered	The lowest price you applied
Window	"a reasonably substantial period"; three months in California	At least 30 days
Do earlier sales count?	Not addressed	Yes, they set the floor
Who enforces it	Private class actions; state attorneys general	National consumer authorities

Member States may carve out perishable goods, goods on the market under 30 days and progressively increasing reductions, so the exceptions depend on national law rather than on the Directive. Our walkthrough of the rest of that regime is in Etsy EU Compliance 2026.

Etsy's Own Layer Is What Deactivates You

None of the three layers above is the one most likely to touch your shop this year, because none of them is automated. Etsy's is.

Etsy publishes seller guidance on truthful advertising and discount practices, and its Seller Policy addresses price comparisons directly; the policy was revised in July 2026, with the superseded version still posted and labelled as effective through 8 July. We are describing that layer rather than quoting it, because etsy.com returns 403 to every automated request we make and we will not reproduce policy text we cannot fetch and verify. Check it in your own browser before you rely on any summary, including this one.

What matters structurally is the consequence. A state-law claim produces a lawsuit years later. A policy breach produces a deactivated listing, a sales interruption in the week you planned the promotion around, and a strike on a record that feeds later decisions - the mechanism in Etsy's most common policy violations. It is also the only layer that reads your listing text at scale, which is why a sale banner's wording carries more operational risk than its legal analysis. Treat it as the binding constraint, and the law as the floor underneath.

The Routine That Survives All Four

Compliance here is a records problem wearing a pricing problem's clothes. Nobody will ask whether your sale was fair; they will ask what the price was on a given date, and you either know or you do not.

1. Keep a dated price log per listing. Date, price, and whether a sale was running. This is the only evidence that answers either the three-month test or the 30-day one, and no marketplace tool keeps it for you.
2. Never raise a price inside 30 days of a planned sale. That single habit is the pen example, 233.1(d)'s "immediately reduced", and the EU floor all at once.
3. Let the regular price actually be the regular price. Run it clean for a substantial stretch before you cross it out. Weeks, not the Thursday.
4. End sales when they end. An extended countdown falsifies a representation you already made, and 233.5 reaches a "limited" offer that is not limited.
5. If a listing is always on sale, cut the base price. Lower the real number and drop the strike-through. You keep the price you were charging anyway and shed the only false element.
6. Delete every "compare at" figure on an item only you sell. Comparable-value claims need a market, and a one-off piece has none.
7. Selling into the EU: compute the 30-day low before you set the percentage. Include your own earlier promotions, and put the prior price in the headline rather than the fine print.

Related Articles

• Etsy Pricing Strategy: Pricing for Profit - the commercial side of the same decision
• Etsy Review Rules 2026: What the FTC Bans - the other FTC problem in the same shop
• Etsy Eco-Friendly Claims 2026: FTC Rules - claim substantiation, same Commission
• Etsy EU Compliance 2026: Why Listings Are Hidden - the rest of the EU layer
• Etsy's Most Common Policy Violations - what Etsy actually removes listings for
• Why Etsy Removed Your Listing - the appeal route once enforcement lands

FAQ

Is it illegal to raise an Etsy price before putting it on sale?

It is the Commission's own example of a false sale. 233.1(c) walks through a seller who inflates a price for a few days to set up a reduction and calls the result "obviously a false claim". 233.1(d) separately catches a price "not maintained for a reasonable length of time, but was immediately reduced". In California it also fails 17501, because the inflated figure was never the prevailing market price.

How long must a price run before I can cross it out?

Federally there is no number: 233.1(a) says "a reasonably substantial period of time". California supplies one indirectly, requiring the former price to have been the prevailing market price in the locality within the three months before the ad. For EU buyers the reference price is the lowest you charged in at least the previous 30 days, which is a different question with a hard answer.

Can I keep a listing on sale permanently?

You can, but the crossed-out price stops being true. 233.1(a) says that where the former price is not genuine the reduced price "is, in reality, probably just the seller's regular price". An item discounted most of the year has a regular price equal to its sale price. Lower the base price and remove the strike-through instead.

Does anyone enforce fake discount rules against small shops?

Rarely as a federal matter. Part 233 is a set of Guides, not a rule, and the Commission's active 2026 pricing work concerns personalized pricing. The live risks are private class actions under state consumer statutes, state attorneys general, and the marketplace itself, which can deactivate a listing without anyone filing anything.

What is "comparable value" and why is it riskier for handmade items?

It is a comparison to what others charge for like merchandise, governed by 233.2. The higher figure must not appreciably exceed prices at which substantial sales are actually being made. For a piece only your shop makes there is no such market, which is the theory behind the private-label allegations in Morgan v. Best Buy. Drop the comparison rather than shrink it.

Do EU rules apply if I am a US seller shipping to Europe?

If you advertise price reductions to EU consumers, Article 6a is the standard those buyers are protected by, and it is enforced by national authorities rather than by Etsy. The prior price is your lowest in at least 30 days, earlier promotions included, and the Court of Justice held in Case C-330/23 that percentage claims must be calculated from it.

Is putting the real former price in the fine print enough?

Not in the EU. That is precisely what C-330/23 rejected: a headline percentage computed from a higher figure is not cured by disclosing the 30-day low elsewhere in the advert. Under the US Guides the question is the net impression of the whole listing, so a correction buried below a prominent crossed-out price is weak there too.