Allegedly misleading customers about sale price discounts has seen four furniture retailers, including high-profile brands Plush and Oz Design Furniture, slapped with penalties.
The ACCC said it had issued infringement notices worth $12,600 each to Plush-Think Sofas, Oz Design Furniture, Koala & Tree (which trades as Koala Living) and ESR Group Holdings (which trades under the Early Settler brand).
All four have since paid the penalties.
The competition took issue with the use of “was/now” sale prices – claiming that products had been retailed at one price before being lowered to the current sale price – when they either never had been sold at the higher price, or had only been advertised at the higher price for a short period of time.
“For example, one of the retailers advertised a ‘Roller Ottoman’ at a price of $539 with the words ‘save $360’, even though it was available for $449 directly before the sale,” the ACCC said.
“Another advertised an occasional chair with the words ‘$799, save $200’, when its usual price for the previous six months was $699, $100 cheaper than the sale price.”
ACCC commissioner Sarah Court said that false inducements are anti-competitive and against the law, disadvantaging both consumers and competitor businesses obeying Australian Consumer Law.
“Consumers rely on comparative pricing to find the best deal available. If there are no genuine savings, businesses are misleading consumers,” she said.
“The ACCC has taken this enforcement action to send a strong message to retailers that they must ensure that any claimed savings are accurate and based on a ‘before’ price which has been offered for a reasonable period when using comparison advertising.”
According to the regulator, payment of infringement notices does not necessarily mean an admission of guilt. The penalties are issued where the ACCC “has reasonable grounds to believe a person or a business has contravened certain consumer protection laws”.
All four retailers have been approached for comment on the matter.
At the time of publishing, only Early Settler had responded, which said it has used the situation as an opportunity to improve its systems.
“Early Settler was involved in the industry-wide ACCC investigation regarding furniture retailers’ advertising earlier this year. We have fully cooperated and complied with ACCC requests. The investigation has been finalised with Early Settler addressing an issue to the ACCC's satisfaction,” it said in a brief statement.
“Early Settler has used the experience to further strengthen our compliance systems and is confident in our compliance systems moving forward to ensure our customers can have complete confidence in our advertising claims.”
The retailer said that “no further comment will be made” on the matter.
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.