Australian retailers are under for fire for allegedly misleading customers about was/now pricing, with the Australian Competition and Consumer Commission (ACCC) cracking down on dodgy price listers in the past month.
The ACCC has slammed one retailer – Outdoor Supacentre Pty Ltd, trading as 4WD Supacentre – with $63,000 in penalties after the camping and outdoor supplies store effectively ignored five infringement notices for dodgy listings, reports Nest Egg.
Between December 2018 and January 2019, the ACCC alleged that 4WD Supacentre advertised high-selling products with a high ‘was’ price and a low ‘now’ price, even though the high was price was not advertised at any time during the three months before the low price.
“4WD Supacentre advertised a camp oven with a ‘was’ price of $279 and a ‘now’ price of $84, representing an apparent saving of $195. In fact, the camp oven had not been advertised at a price higher than $104 for the three-month period beforehand,” read an ACCC statement.
Acting chair of the ACCC Mick Keogh said he was “very concerned that this was misleading consumers into thinking they could achieve significant savings with 4WD Supacentre, when this was not necessarily the case”.
Was/now pricing, also known as, dual advertising, strikethrough pricing and two-price comparison advertising, allows businesses to show a price difference between the previously listed high price and the currently listed low price.
It is legal provided customers are not misled about the savings they can achieve. The goods being sold must have been advertised at the listed higher ‘was’ price for a reasonable period before any further reduction in pricing occurred prior to the currently listed ‘low’ price.
“Businesses must tell the truth when advertising ‘discounted’ prices and must not fabricate increased savings,” said Mr Keogh.
“All businesses should ensure they provide consumers with accurate price information, enabling informed choices by consumers based on potential savings and an even playing field for competing businesses that are doing the right thing.”
The ACCC has also recently issued infringement notices to four popular furniture retailers for similar misuse of was/now pricing.
Plush (Think Sofas Pty Ltd), Koala & Tree Pty Ltd (trading as Koala Living), ESR Group Holdings Pty Ltd (trading as Early Settler) and Oz Design Furniture Pty Ltd all paid a fine of $12,600 for making false or misleading representations to customers.
These retailers advertised claims such as ‘was $2599, now $2049’, and ‘$799, save $200’ when the piece of furniture being promoted had never been advertised at the higher price, or was only advertised at the higher price for a short period. One retailer advertised furniture at a ‘was’ price that was $100 higher than the price listed in the six months prior to the currently advertised low price.
ACCC commissioner Sarah Court slammed this practice, saying customers should be able to rely on comparative pricing.
“If there are no genuine savings, businesses are misleading customers,” said Ms Court.
According to law firm HWL Ebsworth Lawyers, customers considering purchases of goods listed with was/now prices should ask the following questions of retailers.
Has the product previously been offered for sale at the ‘was’ price?
Was there a reasonable opportunity purchase the product at the ‘was’ price?
Have you ever been critical of comparative pricing? Do you think the practice is honest and fair?
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