Kogan has been ordered to pay a $350,000 penalty by the Federal Court after false or misleading representations during its tax time sales promotion.
In July 2020, the Court found that Kogan had misled consumers by advertising over a period of four days that they could use the code TAXTIME to reduce prices by 10% at checkout when Kogan had increased the prices of over 600 products immediately before the promotion.
Kogan made these statements to consumers in June 2018 on its website, via emails sent to over 10 million consumers, and by SMS messages to over 930,000 consumers.
“In many cases, consumers who used the promotional code to purchase these products paid the same as, or more than, they would have paid before or after the promotion,” ACCC chair Rod Sims said.
“Consumers were not receiving a genuine 10% discount as promised, and this affected high-value products such as Apple MacBooks, cameras and Samsung Galaxy mobile handsets.”
Towards the end of the promotion, Kogan also used statements such as ‘48 hours left!’ and ‘Ends midnight tonight!’ in some emails to consumers, to create a sense of urgency to entice consumers to make a purchase during the tax time promotion period.
In her judgment, Justice Davies said: “Kogan’s contravening conduct must be viewed as serious, as misrepresentations about discounts offered on products not only harm purchasers acquiring such products on the basis that they are getting a genuine discount but also may impact on consumer confidence in discount promotions when legitimately made – that is, when products are being offered for sale with a genuine discount on price.”
“This decision sends a strong signal to businesses like Kogan, which regularly conduct online sales promotions, that they must not entice consumers to purchase products with a promise of discounts that are not genuine,” Sims added.