The ACCC has warned retailers to avoid misleading advertising and pricing ahead of Boxing Day sales. Here’s how businesses can stay on the regulator’s ‘nice’ list this festive period.
The ACCC has warned retailers to comply with the Australian Consumer Law ahead of Boxing Day sales after its internet sweep post Black Friday revealed concerns with potentially misleading advertising and pricing practices.[1]
The sweep uncovered ‘concerning practices’ to the ACCC such as:
- ‘site wide’ discounts which are not in fact site wide but have exclusions
- fine print or disclaimers that seek to limit headline claims about the sale, including member only deals or excluding a range of products
- potentially misleading ‘was/now’ pricing, particularly when consumers report that prices increase ahead of a major sales period
- using ‘recommended retail price’ or ‘RRP’ in potentially misleading ways
- ‘up to X% off’ where the ‘up to’ text is not prominent or few products are sold at the X% off.
See these examples below, extracted from the ACCC’s media release.
The regulator is considering further investigations, and reports that it has already issued a number of ‘please explain’ letters asking retailers to justify their claims.
In the meantime, the ACCC is warning retailers ahead of post-Christmas sales that they must comply with the Australian Consumer Law in all the claims they make.
The ACCC’s warning comes just two months after the Treasurer’s announcement of $30 million in additional funding for investigation and enforcement in the supermarkets and retail industry over the next 3.5 years.[2] The ACCC welcomed the additional funding, stating it would provide a ‘significant enhancement’ of its enforcement and compliance activities in the sector.
Cost of living this Christmas
Cost of living pressures are driving regulatory scrutiny of the retail industry. The ACCC has recognised the impact that cost of living has on consumers’ ability to choose, particularly around the holiday season.[3]
‘We know that many consumers rely on sales to save money when shopping for products, especially during this time of cost of living pressure, and when people may be seeking to save up for holidays and festivities. Retailers must not seek to take advantage of this by misleading consumers,’ ACCC Deputy Chair Catriona Lowe said.[4]
Retailers should consider themselves on notice, particularly after the ACCC commenced Federal Court proceedings against Webjet for misleading customers through pricing statements such as ‘flights from $X’ and ‘flights from $X*’.[5] We wrote about those proceedings here.
Staying on the ACCC’s nice list
The ACCC has vowed to continue collecting and reviewing data before, during, and after the end-of-year sales period. In particular, the regulator is concerned about retailers artificially increasing the price of goods to create the perception of a bigger discount. The ACCC says that it has already seen examples of products that were ‘on sale’ selling for the same non-sale price.
Businesses looking to avoid ringing in the New Year with a lump of coal in the form of an ACCC investigation should take care not to:
- make claims of ‘store wide’ or ‘site wide’ discounts if there are exclusions
- use fine print or disclaimers to limit or qualify headline advertisements – a disclaimer will not cure an overall misleading impression
- engage in ‘was/now’ pricing or RRP comparisons that may be misleading. For example, the ACCC considers that the use of comparisons to RRPs may be misleading if the business has not sold the product at the RRP recently, and for a reasonable period of time
- wrongly inform customers as to their statutory rights under the consumer guarantee.
While its focus remains on the potential ‘naughty list’, the ACCC acknowledged the ‘many instances of appropriate and accurate advertising during the Black Friday sales.’
The regulator encouraged businesses to ensure that exclusions are prominently displayed in advertisements and make accurate claims about the scope of their sales. No doubt we’ll hear more from the ACCC after the Boxing Day sales as to who’s been naughty or nice over the Christmas period.
[1] Australian Competition & Consumer Commission, ‘ACCC sweep finds concerning Black Friday ‘sales’ advertising’ (Media Release, 17 December 2024) <https://www.accc.gov.au/media-release/accc-sweep-finds-concerning-black-friday-sales-advertising>.
[2] Australian Competition & Consumer Commission, ‘ACCC welcomes additional retail sector enforcement funding’ (Media Release, 1 October 2024) <https://www.accc.gov.au/media-release/accc-welcomes-additional-retail-sector-enforcement-funding>.
[3] Ibid.
[4] ACCC (n 1).
[5] Australian Competition & Consumer Commission, ‘Webjet alleged to have made misleading claims about airfare prices and flight bookings’ (Media Release, 28 November 2024) <https://www.accc.gov.au/media-release/webjet-alleged-to-have-made-misleading-claims-about-airfare-prices-and-flight-bookings>.
Image credit: Is there a sale on? @ Lowestoft, Suffolk by Tim Parkinson / The Creative Commons / CC BY 2.0 / Remixed to B&W and resized
