Woolworths has been fined $102,000 by the consumer watchdog in Queensland for failing to include terms and conditions on vouchers that offered shoppers “20% off all meat purchases”.
It’s a reminder to all Australian businesses that not informing consumers of all restrictions to a promotional offer can carry financial penalties.
The Queensland Office of Fair Trading issued Woolworths with the civil penalty notice after investigating whether the vouchers, which were circulated via a mailbox drop to homes in Brisbane in early 2015, were misleading.
According to the consumer watchdog, the voucher contained the phrase “20% off all your meat purchases”, however, the offer only applied to fresh meat from the Woolworths meat department and excluded frozen and deli meat.
The Queensland Office of Fair Trading said as the vouchers did not qualify what type of meat would be discounted, this made it “reasonable to assume” the offer applied to all meat sold in store.
Woolworths has since changed the terms of conditions of the voucher for any future promotions, adding the words “must be spent in one transaction on purchases from the Meat Department”.
Brian Bauer, executive director of the Queensland Office of Fair Trading, said in a statement there is no evidence Woolworths was attempting to deliberately mislead shoppers. The payment of a penalty issued via a civil penalty notice is also not an admission that a business has contravened Australian Consumer Law.
However, Bauer said Australian businesses “have a legal obligation to check and identify potentially misleading information before distributing it to consumers”.
“Queensland consumers spend a significant percentage of their income in supermarkets and should be able to rely on the representations being made to them by both large and small retailers,” Bauer said.
A spokesperson for Woolworths told SmartCompany this morning Woolworths acknowledges the fine issued by the Queensland Office of Fair Trading.
“We apologise to our customers that the details of a meat promotion were unclear,” the spokesperson says.
“Woolworths noted the issued quickly and changed the details of the offer in following week’s voucher.
“We thank the Queensland Office of Fair Trading for their acknowledgment that Woolworths had no intention to deceive customers. We also not the amount of the fine is set by legislation.”
Lessons for small businesses
Businesses of all sizes can face financial penalties under the Australian Consumer Law if false or misleading representations are made about the price of goods.
Narissa Corrigan, principal at Ampersand Legal, told SmartCompany this morning the overarching obligation for SMEs is to “make sure any offer isn’t misleading or deceptive”.
This means ensuring any conditions are clear to the customer when the offer is made.
Corrigan says this incudes things such as a start and end date to the promotion, any restrictions as well as if the customer must buy particular products or spend over a certain amount of money to qualify for the offer. This also applies to online coupons or offers.
While Corrigan says some businesses do make offers that have no conditions, this is unusual. And she says most consumers will assume conditions apply to promotional offers.
Nevertheless, the onus is on the business to communicate the conditions clearly.
“It must be advertised in a way that is clear and obvious, so there is no doubt in the mind of consumers redeeming the offer,” she says.