Snooze gets wake up call on pricing
Retailers have been put on notice with regard to the risks of misleading pricing strategies, after two bedding and furniture retail brands were hauled up by the Australian Competition and Consumer Commission (ACCC).
Late last month furniture retailer Snooze admitted an advertising campaign conducted in October last year was misleading to customers, in terms of the amount of savings they would receive on selected products. The company has determined to send $50 gift vouchers to customers who have purchased products advertised in the campaign, along with a written apology.
The ACCC identified Snooze's conduct after undertaking a preliminary audit, in which it confirmed the company's campaign advertised products in a "two-price" format, featuring a "was/now" price comparison. However it was found that some of Snooze's products had been offered for sale at a cheaper price than was stated in the "was" category.
Snooze conceded its "was" prices were no more than a reference to the company's own internally-set recommended retail prices, not the prices at which those products were offered for sale to the public before the campaign took place.
The retailer ceased its conduct - a breach of the Trade Practices Act - when it was identified. It will also undertake a trade practices compliance program.
A statement from ACCC chairman Graeme Samuel said two-price advertising was misleading as it could make prices seem more attractive to consumers if 'was' prices were false or inflated.
"Such advertising places businesses at serious risk of breaking the law," he said. "An advertised higher price must be genuine and have applied prior to the sale for a reasonable period of time."
The Snooze case follows that of Furniture and Bedding Concepts, which operates under the Sleep City and Everyday Living brands, which agreed to give customers $100 gift vouchers in June for similar activity.
A catalogue from the company advertised a "save $X" offer, but the ACCC said the advertised savings amount was calculated by internally-set recommended retail prices.
Comments
The ACCC doesn't go far enough. How many retailers lost sales to Snooze, Sleep City & Everyday Living due to the misleading greater saving?
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Damian Schroeter
It is about time that the "Bigger" players got a wake up call, as they are caught out by what is surely a product of their own creativity / ignorance to consumers. I can only hope that other retailers take a lesson from this and monitor their own advertising campaigns carefully to avoid the same thing happening. Consumers have a right to asume that the information presented with a product is true and honest. I am surprised that it has taken this long for an example to be made of a well known retailer when companies such as JB, The Reject Shop, and Furniture Direct (ACT) present misleading product information on a daily basis. I had to laugh a few months ago when The Reject Shop advertised a MDF console table as "solid pine" both in print catalogues and product ticketing in stores and packaging. Consumers are not stupid, far from it, consumers allow retailers to continue to trade and the economy to progress. Just a thought. Damian Schroeter Industrial Designer