NSW Fair Trading Minister Matthew Mason-Cox today revealed that Fair Trading officers had inspected 26 retailers and manufacturers, as part of a national compliance blitz focusing on cash back offers.
Mr Mason-Cox said since March, Australian fair trading regulators had scrutinised cash back deals at 35 businesses across the country to ensure that that offers promoted complied with the Australian Consumer Law.
“Cash back offers are where a business offers to return some of the consumer’s money after purchase, rather than discounting the product itself,” Mr Mason-Cox said.
“Traders were identified based on complaints data, as well as a coordinated internet scan to identify promotions on websites targeting Australian consumers.
“Officers visited retailers in each state and identified the specific promotions that were on offer and the details of the promoter or manufacturer.”
In one particular case, a retailer was selling a Tab 3.7.0 Kid Version tablet with a $50 cash back offer. When questioned by NSW Fair Trading inspectors, the store attendant referred all enquiries to the manufacturer’s website.
The item was advertised on the trader’s website with the cash back offer appearing prominently. The advertisement included the manufacturer’s website where the terms and conditions could be downloaded but it was not available in the store.
“Following those visits, 20 substantiation notices were issued Australia-wide,’’ Mr Mason-Cox said. “Businesses visited were primarily electronic retailers due to the large number of cash back promotions in the electronics sector.’’
Mr Mason-Cox said that in NSW, Fair Trading issued 17 substantiation notices. “Fifteen businesses were able to provide satisfactory responses and two matters are under investigation,” he said.
“NSW Fair Trading asked manufacturers to demonstrate that customers were provided with their rebate in a timely and efficient manner.
“NSW Fair Trading required retailers in this state to demonstrate that sufficient information was available in-store for consumers, that staff had adequate knowledge of the offer to address queries, and that the store had satisfactory procedures in place to deal with complaints.’’
Mr Mason-Cox said information available to NSW Fair Trading about cash back offers on four products by major manufacturers showed that on average, around 70 per cent of consumers did not claim their cash back from the manufacturers of these products.
“The additional time and effort required by the consumer to lodge their claims with the manufacturer may be a major disincentive for consumers,” he said.
Mr Mason-Cox said the high percentage of NSW consumers not claiming their cash back was concerning and should be a wakeup call for businesses that more needed to be done by them to ensure consumers were claiming the potential discount on offer.
“Businesses need to ensure their advertising displayed the full price before cash back,” he said.
“Often the cash back offer is made by a manufacturer not the retailer, but that doesn’t mean the retailer shouldn’t make a genuine effort to facilitate the cash back process.
“Retailers need to invest in staff training to ensure they can answer consumer questions, have terms and conditions readily available in store, and be able to put consumers directly in contact with the manufacturer to assist them in redeeming the offer.”
Mr Mason-Cox said the key for consumers was to ask about the terms and conditions of the cash back offer, including how the cash back will operate.
“NSW Fair Trading will continue to monitor the market to ensure retailers are meeting their obligations, Mr Mason-Cox warned.
“Businesses caught deliberately misleading the public with the pricing of their goods and services face a penalty of $1.1 million for corporations and $220,000 for individuals.’’