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What Does "Price on Application" Mean?

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  • Written By: Mary McMahon
  • Edited By: Nancy Fann-Im
  • Last Modified Date: 20 August 2016
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    Conjecture Corporation
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Price on application is a term in advertising and other materials that indicates it is necessary to contact an agent or representative to get pricing information. There are a number of reasons to conceal or obscure a sales price, including privacy concerns or fluctuating prices that make it inadvisable to publish a concrete price. Consumers often take this term to mean that an asset is overpriced, although this is not necessarily the case. As a result of perceptions about it, advertising featuring price on application products and services can result in less consumer interest. Consumers may assume they can't afford it and will not make inquiries about the price.

One reason to use “price on application” in promotional materials is as a placeholder because the price is not fixed yet. A developer might distribute materials about a planned housing development with this language, for example. This allows the developer to start marketing and selling homes without having to commit to a specific price at the time materials are prepared. This can also be useful for timelessness; when POA is the only price listed, a document can be used indefinitely because it will not contain inaccurate information.

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Another reason may be because of the personalized and custom nature of a product or service. A coffin maker, for instance, can configure coffins to meet the precise needs of her clients. She may indicate that prices are available on application because she doesn't want to set a base price on custom projects. Factors like size, extra features, lining, delivery fees, and so forth could bring the price up or down and any listed price would be wildly inaccurate as a result.

Commodities with rapidly fluctuating prices can also be a cause for concern. If the price is listed, it may only be good for a short period of time. Listing such commodities as price available on application allows a company to constantly update prices and give consumers a real quote when they need one. A natural gas company might indicate “price on application” for services in its brochures, for example, because natural gas prices wax and wane.

In real estate, some listings are POA for privacy reasons, and to discourage casual buyers. Owners may not be comfortable with a public disclosure of the asking price, or could have concerns about the safety of their property if it is valuable and they are not always around to monitor it. Agents may also recommend this pricing scheme in an uncertain market because it conceals price changes. If buyers see the price of a property dropping over time as the real estate agent moves the price to appeal to customers, the buyers may see room for negotiation and try to get a lower price. When the property is price on application, any fluctuations in asking price are confidential.

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