NSW Fair Trading Minister Matthew Mason-Cox revealed today Fair Trading officers had visited 30 businesses and checked nearly 150 products, as part of a national campaign targeting ‘was/now’ pricing and recommended retail price promotions.
“Since March, fair trading regulators from around the country have been examining ‘was/now’ pricing and recommended retail price promotions, Mr Mason-Cox said.
“‘Was/now’ pricing is where a business displays a previous higher price, along with the current lower price, to demonstrate a discount.
“Nationally, a total of 78 traders were visited and 36 substantiation notices were issued.
“Traders were identified based on complaints data, as well as a coordinated internet scan to identify promotions on websites targeting Australian consumers.
“Businesses visited included furniture retailers, supermarkets, department stores, jewellers and other specialist retailers.’’
Mr Mason-Cox said NSW Fair Trading issued 13 substantiation notices to retailers using was/now sales techniques in their stores or online.
“Six traders were able to substantiate their representations; one trader received an education letter to remind them of their obligations and six matters are under investigation,” he said.
“Key issues identified include a failure to previously sell at the ‘was’ price; variances in the period the product was sold at the ‘was’ price; and the use of recommended retail price as the ‘was’ price and how this could be substantiated.”
Mr Mason-Cox said businesses must be able to verify the accuracy of the ‘was’ prices and recommended retail prices quoted on their website and promotional material.
“Consumers have the right to expect that advertising is truthful and promotions are offered in good faith,” he said.
One retailer, for example, was the promotion of the sale of a Canon PIXMA Multifunction Colour Inkjet Printer MG2560. The printer was first brought in with a regular price of $59. However, due to the late delivery of the printers to the store, this price was not established and was offered at $39 without ever being sold at the higher price.
The retailer has proposed to address this issue by placing corrective notices in major metropolitan press and in their stores, offering a gift card for the difference between the ‘was’ price and the now price.
The retailer has also committed to conducting consumer law training across the buying and marketing departments within the organisation.
The corrective advertising and other measures are expected to occur prior to Christmas 2014.
“While businesses generally appear to be taking their Australian Consumer Law obligations seriously, fair trading regulators will continue to perform unannounced and covert checks to ensure it stays that way.
Mr Mason-Cox said businesses caught deliberately misleading the public with the pricing of their goods and services face penalty of $1.1 million for corporations and $220,000 for individuals,” he said.