Kogan misled customers over EOFY sale after price jacking 600 products, Federal Court rules

Kogan

Kogan chief executive officer Ruslan Kogan.

The Federal Court has ruled e-commerce retailer Kogan.com made false and misleading representations to consumers about a 2018 end of financial year promotion.

The court decided Kogan fell foul of Australian Consumer Law during an online promotion between June 27 and June 30 in 2018, when it told consumers they could use the code “TAXTIME” to reduce prices by 10% at checkout.

But Kogan had increased the prices of more than 600 of its products immediately before the promotion, the court found, with most hiked by at least 10%.

The price jacking case, brought by the Australian Competition and Consumer Commission (ACCC), identified more than 10 million marketing emails and 930,000 text messages sent to customers about the promotion.

“We brought this case because we were concerned that the advertised price reductions were not genuine savings,” ACCC chair Rod Sims said in a statement on Friday.

“Many consumers who took up the offer on one or more of the 600 or so products in many cases actually paid the same as, or more than, what they would have paid immediately before and after the promotion.

“All businesses must ensure that their advertisements do not mislead consumers about the nature of a promotion, and that any promised savings are genuine,” he said.

Kogan

The offending sale. Source: ACCC

The Federal Court will hand down penalties in a follow up hearing, where the ACCC will seek declarations, injunctions, pecuniary penalties and legal costs.

In a statement to the Australian Securities Exchange, Kogan said the profit generated by the promotion was “immaterial” and the court’s ruling will not have an adverse effect on its promotional activities.

Kogan said it is reviewing the court’s ruling and may provide another update after this review is completed.

The ACCC launched the case in May 2019, having previously taken aim at Kogan over several other promotions the company has run in 2016 and 2009.

NOW READ: “Eroded any real discount”: Kogan to face court over fresh price-jacking claims

NOW READ: Ruslan Kogan warns of multiple online retail collapses as his electronics business eyes potential acquisitions

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