Planning to discount? The ACCC is watching

If you’re thinking of beating the downturn by luring customers with some zany discounts, you’d better be careful – the ACCC is watching the misuse of discounting very closely.

If you’re thinking of beating the downturn by luring customers with some zany discounts, you’d better be careful – the ACCC is watching the misuse of discounting very closely.

In its latest crackdown, the watchdog has taken aim at bedding retailers that have been advertising sharp discounts on their goods using a technique known as two-price advertising.

This method is designed to emphasise the price discount on a product. It is often expressed as “was $1999/now $1299” or “$1999 $1299”.

But where those savings are not genuine – for example, if the product was never offered for sale at the “was” price – these sort of ads are likely to be misleading and breach fair trading laws.

“Misleading two-price advertising can induce consumers into purchasing products as well as having an adverse impact on the sales of those retailers complying with the law,” ACCC chairman Graeme Samuel says.

Samuel says the review of two-price bed advertising by fair trading agencies is part of a proactive approach in looking at pricing practices.

As part of the review of bed advertising, the watchdog will be requesting information from retailers to support price claims made in their advertising. The review of bed advertising follows previous action against companies involved in two-price advertising in the jewellery industry in 2007.

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