Online retailer Kogan.com.au has been forced to part with $32,400 in fines after he was exposed for dodgy marketing practices that involved jacking up the price of goods prior to offering a 20% discount.
Kogan.Com Pty Ltd (Kogan) was caught out by the Australian Competition and Consumer Commission after the ACCC issued infringement notices because it had reasonable grounds to believe that Kogan had made false or misleading representations about the price of three computer monitors advertised by Kogan during a Fathers’ Day promotion on its eBay store, in contravention of the Australian Consumer Law.
As part of the Fathers’ Day promotion in 2015, Kogan advertised on its eBay store that consumers would receive a 20% discount on the following computer monitors if they were purchased between 24th and 29th August 2015:
Kogan 27″ Cinema Display WQHD;
Kogan 28″ 4k LED Monitor; and
Asus 27″ LED Monitor PB278Q.
Before or at the start of the promotion, Kogan increased the prices of the three computer monitors featured on its eBay store.
As a result, although consumers received a 20% discount off the newly increased prices, they in fact only received a 9% discount off the previously advertised prices for each of the three computer monitors.
Shortly after the promotion ended and the 20% discount offer ceased, the advertised prices of the three computer monitors returned to the lower prices offered on Kogan’s eBay store before the promotion commenced.
“It is simply unacceptable for businesses to raise prices before applying a discount in order to give consumers the misleading impression that they are obtaining a larger percentage discount than is actually the case,” ACCC Acting Chair Dr Michael Schaper said.
“Truth in advertising and consumer issues in the online market place are both current enforcement priorities,” Dr Schaper said.
The payment of a penalty specified in an infringement notice is not an admission of a contravention of the Australia Consumer Law. The ACCC can issue an infringement notice where it has reasonable grounds to believe a person has contravened certain consumer protection laws.
