Furniture retailer Snooze has admitted an advertising campaign conducted in October last year likely deceived customers about the amount of savings they would receive on some products.
The action, undertaken by the Australian Competition and Consumer Commission, comes just a few months after a separate furniture retailer was ordered to deliver gift vouchers to customers for similar activities.
The company will now send gift vouchers to customers who have purchased products advertised in the campaign, along with a written apology.
The Australian Competition and Consumer Commission, which identified the misleading conduct through a preliminary audit, has said the company’s campaign advertised products in a “two-price” format, featuring a “was/now” price comparison.
But the audit found some of Snooze’s products has been offered for sale, or had sold, for a cheaper price than was stated in the “was” category.
Snooze told the ACCC its “was” prices were actually just a reference to the company’s own internally-set recommended retail prices, not the prices at which those products were offered for sale to the public before the campaign took place.
As a result the company, which owns and operates 70 retail stores across the country, said its “was/now” campaign may have misled or deceived customers in a breach of the Trade Practices Act.
The ACCC said Snooze stopped the misleading conduct when the activity was identified, and offered court-enforceable undertakings.
Customers who bought products contained in the advertising will be offered a $50 gift voucher, along with a written apology from the company.
In addition, corrective notices will be displayed in Snooze stores, with an information notice also set to be published in FB Magazine. A trade practices compliance program will also be undertaken, according to the ACCC.
“Two-price advertising can make a sale price seem more attractive to consumers, but where the ‘was’ price is false or inflated, customers can be misled,” chairman Graeme Samuel said in a statement. “Such advertising places businesses at serious risk of breaking the law.
“An advertised higher price must be genuine and have applied prior to the sale for a reasonable period of time.”
The events come after Furniture and Bedding Concepts, which operates under the Sleep City and Everyday Living brands, agreed to give customers $100 gift vouchers in June for similar activity.
A catalogue from the company advertised a “save $X” offer, but the ACCC said the advertised savings amount was calculated by internally-set recommended retail prices.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
