On 14 January 2020, the Australian Competition and Consumer Commission announced that Outdoor Supacentre Pty Ltd (trading as 4WD Supacentre) had paid five infringement notice penalties (totalling $63,000) in connection with advertising claims about was/now pricing that were likely to mislead consumers and therefore contravene section 29(1) of the Australian Consumer Law.
Further to paying the $63,000 penalty, 4WD Supacentre provided a section 87B undertaking to the ACCC that it will:
- Not engage in similar conduct.
- Place corrective advertising on its website and maintain it for 30 days.
- Ensure advertising material is reviewed, and implement and maintain for at least 3 years a Competition and Consumer Act compliance program.
The alleged conduct which gave rise to the infringement notices involved 4WD Supacentre advertising prices for products which could mislead consumers into thinking they could achieve significant savings from 4WD Supercentre, which was not the case, according the ACCC. By way of example, a camp oven was advertised with a ‘was’ price of $279 and a ‘now’ price of $84, representing a saving of $195. In fact, the camp oven had not been advertised at a price higher than $104 in the three months prior.
‘Was/now’ advertising is a technique frequently used by advertisers to highlight the price comparison between past prices and current prices of products, used to attract potential customers and to emphasise discounts.
In order to ensure compliance with the Australian Consumer Law, it is necessary to ensure savings marketed through these statements are genuine and not likely to mislead consumers. This involves ensuring that the product advertised was sold at the ‘was’ price for a ‘reasonable period’ prior to the advertisement. Establishing a ‘reasonable period’ will depend on the circumstances and usually involves providing evidence of selling the product at the ‘was’ price. This may be harder to establish if a company regularly discounts its products.
The golden rule a company must ask itself is whether a typical customer is likely to be misled about the genuine savings they will receive from buying the product at the ‘now’ price? This rule can be followed by accurately representing actual savings available to consumers and ensuring any pricing claims can be substantiated by having records indicating when and for what period of time a product has been sold at different prices.
Long Saad Woodbridge’s commercial team have significant advertising expertise both within specific industries and more broadly to assist clients in ensuring the legal compliance of their advertising.
Important Disclaimer: The content of this publication is general in nature and for reference purposes only. It is current at the date of publication. It does not constitute legal advice and should not be relied upon as such. Legal advice about your specific circumstances should always be obtained before taking any action based on this publication.