The ACCC is starting to really crack down on retailers who participate in false advertising, especially catalogue sales that offer false price comparisons.
The ACCC announced yesterday that it had proven Furniture and Bedding Concepts Ltd, which owns and operates 107 retail stores under the Sleep City and Everyday Living brands, was falsely advertising in its spring catalogue last year.
According to the ACCC the catalogue was promoting price comparisons in the form of ‘Now $X, Save $Y’, but the save prices were determined by reference to the company’s own internally-set recommended retail prices, not the prices at which the products were offered, or sold, for reasonable time before the sale.
Upon realisation of this breach Sleep City and Everyday living admitted that the catalogue representations did not accurately reflect the savings available for many of the items during the sale.
To rectify the situation, Sleep City and Everyday Living are offering customers who purchased a catalogue item during August and September 2008, a $100 gift voucher.
Acting ACCC chairman, Peter Kell, commented on how powerful price comparison advertising can be for retailers.
“Two-price advertising can be a very powerful tool in advertising and is designed to encourage consumers to buy a product by implying that the current price is less than they would pay outside a sale period,” he said.
“However, retailers must ensure that the claimed savings are genuine or they run a serious risk of breaching the law.”
Kell was impressed with how Sleep City and Everyday Living reacted to the situation.
“The ACCC was pleased that Sleep City and Everyday Living co-operated with the ACCC during its investigation and offered redress to consumers who may have been affected.”