Quick answer
In France, a retailer may neither resell nor advertise the resale of a product in its original state below its effective purchase price (“prix d’achat effectif”, Article L442-5 of the French Commercial Code). Black Friday is not an exception, unlike the official sales periods. The fine can reach 0.4% of annual turnover excluding VAT generated in France. Calculate a floor price for each product before any promotion.
A competitor goes below your floor price?
A threshold alert notifies you, so you can decide without breaking the rules.
Test 3 URLs for freeAs Black Friday approaches, it is tempting to follow a competitor that slashes its prices, even if it means going below your own purchase price. In France, this is prohibited in most cases, and the ban also covers simply advertising the price. This article covers French law, which applies to online stores selling in France; other countries have their own rules on below-cost selling. Here is how to calculate your threshold, the exceptions provided by law and what to do when a competitor goes lower than you.
What is resale at a loss?
Article L442-5 of the French Commercial Code prohibits any retailer from reselling or announcing the resale of a product in its original state at a price below its effective purchase price. Three elements matter:
- Resale: the rule covers products that a retailer buys in order to resell them.
- In its original state: the product is resold as purchased, without transformation.
- Announcing: displaying a price below the threshold on your website, in a newsletter or in an advertisement is already covered by the text, even before any sale.
How do you calculate the resale-at-a-loss threshold?
The threshold is the effective purchase price. The French Commercial Code defines it as follows:
Fictitious example for a pair of headphones:
| Item | Amount |
|---|---|
| Net unit price on the purchase invoice | €30.00 excl. VAT |
| Other financial benefits from the supplier (5%) | − €1.50 |
| Transport, per unit | + €1.50 |
| Subtotal | €30.00 excl. VAT |
| VAT at 20% | + €6.00 |
| Effective purchase price (threshold) | €36.00 incl. VAT |
Displayed at €35 including VAT on Black Friday, these headphones would be resold at a loss, even with a one-euro gap. At €36, the sale is legal but earns nothing: the legal threshold ignores your shipping costs, payment or marketplace fees and advertising. Your economic floor price is therefore higher than the legal threshold.
Two special cases: the effective purchase price is multiplied by 0.9 for wholesalers that sell exclusively to independent businesses and, according to the DGCCRF, by 1.10 until 15 April 2028 for food products and pet food. An online grocery store whose effective purchase price is €10 cannot resell that product below €11.
Is Black Friday an exception?
No. French law provides seven exceptions, and Black Friday is not one of them. The same goes for Cyber Monday or the French Days: they are commercial events, not cases listed in the text.
| Exception (Art. L442-5, II) | In practice |
|---|---|
| 1. Closure or change of business | Voluntary or forced sales due to a closure or a change of activity. |
| 2. Products with a marked seasonal character | During the final period of the selling season and between two seasons. |
| 3. Outdated products | Products no longer meeting general demand because of fashion or technical progress: past collection, previous generation. |
| 4. Restocking at a lower price | For an identical product bought again for less, the new invoice price becomes the reference. |
| 5. Price alignment by certain stores | Stores under 300 m² (food) or 1,000 m² (non-food) matching a price lawfully charged in the same trading area. |
| 6. Perishable products at risk of rapid deterioration | Provided the offer is not advertised outside the point of sale. |
| 7. Products on sale during the official sales | During the “soldes” within the meaning of Article L310-3 of the Commercial Code. |
The official sales (“soldes”) take place during two periods a year, set by ministerial order (Article L310-3). According to the DGCCRF, winter sales start on the second Wednesday of January and summer sales on the last Wednesday of June, and these dates also apply to online sales. Black Friday, at the end of November, falls outside them.
Can you match a competitor that sells for less?
This is the most common question when you monitor competitors. The short answer: not below your effective purchase price. The only alignment exception (5) covers stores with a limited sales area that match a price lawfully charged in the same trading area. The text does not create a general right to follow any competing website. If you think you are in that situation, have it confirmed by a legal adviser.
A competitor may display a price below your threshold for its own reasons: better purchasing terms, end of line, closing down. Rather than following it:
- Check the comparison. Same reference, same condition, same bundle? Compare the final price, delivery included (see how to avoid product matching errors).
- Look at the duration. A one-day drop does not call for the same response as a lasting repositioning: price history makes the difference.
- Renegotiate your purchasing terms. If you restock for less, the new invoice becomes your reference (exception 4).
- Use other levers: availability, delivery time, service, or a promotion on another product whose margin allows it.
- Measure the cost of a price cut. Even above the threshold, a discount can require many more sales to keep the same profit (see how a discount affects your margin).
What are the penalties for resale at a loss?
- A fine of up to 0.4% of annual turnover excluding VAT generated in France in the last closed financial year.
- A fine that can be raised to half of the advertising expenses when an advertisement, in any medium, shows a price below the effective purchase price.
- The advertising can be ordered to stop, and a company held liable may have the decision displayed or published.
This turnover-based cap results from the wording in force since 15 April 2025 (Law no. 2025-337 of 14 April 2025). Many pages still quote the former €75,000 fine: check the date of your sources.
How can you avoid resale at a loss during your promotions?
- Calculate a floor price for each product from your invoices (net price, benefits, taxes, transport) and store it in your catalogue.
- Check the final price after all discounts: promotion, promo code and basket discount stack up. Two successive discounts of 20% and 10% make 28%, not 30% (see successive discounts).
- Check your strikethrough prices too: the announced discount must start from the lowest price of the last 30 days (see the 30-day rule).
- Set an alert on your threshold. In Competiprice, a threshold alert notifies you when a competitor’s price falls below an amount you set, such as your floor price. You know straight away not to follow it and can prepare another response.
- Keep your supporting documents: invoices, commercial terms and the history of your prices.
No account needed. Then one threshold alert per product is enough to be notified.
Frequently asked questions about selling below cost in France
Is selling at a loss allowed on Black Friday in France?
No. Black Friday is not one of the seven exceptions in Article L442-5 of the French Commercial Code. Outside those exceptions, which include products on sale during the official sales periods, a product may not be resold below its effective purchase price.
How do you calculate the resale-at-a-loss threshold?
Start from the net unit price on the purchase invoice, deduct the other financial benefits granted by the supplier, then add turnover taxes (VAT), specific taxes and transport. The result is the effective purchase price, below which resale is prohibited except in the listed cases.
What is the fine for resale at a loss in France?
Up to 0.4% of annual turnover excluding VAT generated in France in the last closed financial year, and up to half of the advertising expenses if an advertisement shows a price below the effective purchase price (wording in force since 15 April 2025).
Can you sell at a loss during the French sales?
Yes: products on sale within the meaning of Article L310-3 of the Commercial Code are one of the exceptions. The official sales take place during two periods a year set by ministerial order, including for online sales.
Can an online store match a competitor that is cheaper than its purchase price?
In principle, no. The alignment exception covers stores under 300 m² (food) or 1,000 m² (non-food) that match a price lawfully charged in the same trading area. Outside the listed exceptions, the price must not fall below the effective purchase price.
Sources consulted on 30 September 2026 (in French): French Commercial Code, Article L442-5 and Article L310-3; DGCCRF, resale at a loss: the seller’s obligations and official sales: consumer rights and retailer obligations. This article is general information, not legal advice.