The Good Guys, a JB Hi-Fi subsidiary, will recognise a $13.7 million one-off expense in its FY25 results due to a settlement related to its false or misleading representations about its StoreCash and credit offers.
The Good Guys will also contribute $200,000 towards the legal costs incurred by the Australian Competition and Consumer Commission (ACCC), which filed the proceedings against the company.
Moreover, the company will implement a remediation program for certain customers. The cost of this program has been accounted for in prior periods and will not affect the FY25 results.
In July 2024, the ACCC filed proceedings in the Federal Court, alleging that The Good Guys engaged in misleading representations of its StoreCash and credit offers and failed to provide credits to eligible customers.
The proceedings relate to 116 promotions run between July 2019 and August 2023, where customers were promised store credit if they spent a certain amount online or in‑store.
The ACCC alleged that The Good Guys failed to clearly communicate that customers had to opt in for marketing communications to qualify for the credits, and that many credits expired within seven to 10 days, despite representing that the credits would be valid for a reasonable period.
“We allege that the conditions for consumers to receive a store credit as part of The Good Guys’ promotions were not communicated adequately in The Good Guys’ marketing materials. We also understand that, for the majority of promotions, the store credit being offered expired within a very short period of time of ten days or less, which many consumers were unaware of,” Gina Cass‑Gottlieb, ACCC Chair, said.
The ACCC further alleged that The Good Guys failed to provide credits to thousands of eligible customers within the specified or a reasonable time.
“Even where consumers met the conditions, we allege that The Good Guys did not provide a store credit at all to many eligible consumers,” Cass‑Gottlieb said.
In a statement, The Good Guys said it takes its compliance obligations seriously and has worked cooperatively with the ACCC throughout the proceedings.
“The Good Guys has always sought to provide value and benefits to its customers and has always prided itself on its high levels of trust with consumers,” the company said.
The proposed penalty is still subject to the Federal Court’s approval.