Online electronics retailer Kogan has paid $32,400 in penalties after the consumer watchdog took action over products advertised on the Kogan eBay store during its Father’s Day promotions.
The Australian Competition and Consumer Commission issued three infringement notices for the pricing of three computer monitors, which changed over a five-day period as part of a Father’s Day promotion last year.
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From August 24 to August 29, consumers were promised a 20% discount on the three computer monitors as part of the promotion.
But the ACCC said in a statement this morning, Kogan had increased the prices of the three computer monitors featured on its eBay store prior to the promotion period, so the 20% discount really equated to just 9% off the previously advertised prices.
Shortly after the end of the promotion and 20%, the advertised prices of the three computer monitors returned to the previous lower prices offered.
The computer monitors named in the infringement notices are:
- Kogan 27” Cinema Display WQHD;
- Kogan 28” 4k LED Monitor; and
- Asus 27” LED Monitor PB278Q.
Nicole Wilson, senior lawyer at LegalVision, told SmartCompany this morning businesses need to be careful when communicating with customers that they are clearly stating the facts.
“If you let customers believe something about your products or services when it is not true, whether this was done intentionally or not, you will be in breach of the Australian Consumer Law,” she says.
Wilson says businesses must also be careful when running sales and promotions.
“Businesses should only ever offer ‘sale’ or ‘discount’ on their goods for a limited time,” Wilson says.
“You run the risk of the ‘sale’ price becoming the actual price if it is used for an extended period of time. If this happens the ongoing use of the term ‘sale’ or ‘discount’ in conjunction with the price will be misleading and you may be asked by the ACCC to justify your pricing.”
In a statement ACCC acting chair Michael Schaper said truth in advertising online products is a current enforcement policy for the ACCC.
“It is simply unacceptable for businesses to raise prices before applying a discount in order to give consumers the misleading impression that they are obtaining a larger percentage discount than is actually the case,” he said.
Paying infringement notices from the ACCC is not an admission of flouting the Australian Consumer Law.
SmartCompany contacted Kogan but the company declined to comment.