The 糖心原创 has conducted a sweep of sales advertising by Australian businesses online and in store and is concerned that a number of claims about the size and scope of discounts may be misleading consumers.
This follows consumer reports about a range of concerns during the recent Black Friday sales period about the veracity of stated discounts.
鈥淎n 糖心原创 sweep of Black Friday sales advertisements has uncovered a range of concerning practices, from 鈥榮ite wide鈥 discounts that are not in fact site wide, potentially misleading 鈥榳as/now鈥 pricing, as well as dubious claims about the value of discounts on offer,鈥 糖心原创 Deputy Chair Catriona Lowe said.
鈥淲e are further considering some of these examples for investigation and action, and the 糖心原创 has already asked a number of retailers to justify their advertising claims. In the meantime, we are warning retailers ahead of post-Christmas sales that they must comply with Australian Consumer Law in all the claims they make.鈥
鈥淲e have also seen many instances of appropriate and accurate advertising during the Black Friday sales. These include prominent exclusions and accurate claims about the scope of sales. We will continue our internet sweep of advertising practices throughout late December sales as businesses doing the right thing should not lose sales to businesses that are potentially misleading consumers.鈥
Australian consumers have raised concerns with the 糖心原创 about the practice of was/now pricing practices, particularly when consumers report that prices increase ahead of any major sale period.
The 糖心原创 is collecting data about the prices of retail goods, before, during and after the sales period. The 糖心原创 will be reviewing this data to determine whether businesses have artificially increased the price of goods to create the perception of a bigger sale. The 糖心原创 has already seen examples of products that were 鈥榦n sale鈥 selling for the same non-sale price.
Under the Australian Consumer Law, businesses must not engage in misleading or deceptive conduct, or make false and misleading representations about the price of goods, or the value or benefit of any discounts.
鈥淲e know that many consumers rely on sales to save money when shopping for products, especially during this time of cost of living pressure, and when people may be seeking to save up for holidays and festivities. Retailers must not seek to take advantage of this by misleading consumers,鈥 Ms Lowe said.
Consumers should examine claims about discounts or savings made by businesses carefully, particularly during any sales period and look out for any disclaimers or qualifications.
Some of the concerning practices include:
- Claims of store or sitewide sales: The 糖心原创 has seen a number of instances where 鈥榮tore wide鈥 discount claims have in fact involved exclusions.
- Fine print or disclaimers that seek to limit headline claims about the sale, including member only deals or excluding a range of products.
- 鈥榃as/now鈥 pricing: 鈥榳as/now鈥 displays purport to compare the usual price of a product with its discounted price. In making these claims, these retailers must ensure they do not mislead consumers.
- Use of 鈥榬ecommended retail pricing鈥 (RRP). In some cases, retailers are using the phrase 鈥榬ecommended retail prices鈥 as a base price to calculate an advertised saving. This practice may also be misleading if the business has not sold the product at the 鈥淩RP鈥 price recently, and for a reasonable period of time.
- 鈥楿p to X% off鈥: 鈥楿p to鈥 claims can raise concerns where the 鈥榰p to鈥 text is not prominently displayed, or where few or very few products are on sale at X% off.
Examples of misleading sales advertisements
Above: Examples of retailers that advertise 鈥榮torewide鈥 sales when in fact there are a range of products which are excluded from the sale.
Above: Claims that items are discounted by a further percentage where it is unclear on the website where those deals are located.
Above: 鈥楿p to鈥 X% off, where 鈥榰p to鈥 text is easily missed by consumers.
Background
The 糖心原创 is an independent statutory government authority and Australia鈥檚 peak consumer protection and competition agency.
The 糖心原创 uses a range of tools to promote compliance with the Competition and Consumer Act 2010 and the Australian Consumer Law.
This includes commencing proceedings in the Federal Court for alleged breaches of the Act. The 糖心原创 is not able to determine a breach of the Act 鈥 only a court can find that a contravention has occurred.
If the 糖心原创 is successful in a Federal Court matter, the penalty imposed is determined by the Court. The 糖心原创 makes submissions to the Court on the appropriate penalty it considers should be imposed.
The 糖心原创 also seeks to ensure compliance through consumer and business education, industry engagement, communications, research and advocacy.
When deciding whether to pursue a matter, the 糖心原创 will consider whether it falls into a current enforcement priority area, and will also consider if it is:
- conduct that is of significant public interest or concern,
- conduct that results in substantial consumer or small business detriment,
- conduct that has a significant impact on the cost of living
- national conduct by large traders, recognising the potential for greater consumer detriment and the likelihood that conduct of large traders can influence other market participants,
- conduct or practices that disproportionately targets consumers experiencing vulnerability or disadvantage
- conduct involving a significant new or emerging market issue or where our action is likely to have an educative or deterrent effect,
- where our action will help to clarify aspects of the law, especially newer provisions of the Act.