Confused customers call out store’s ‘liquidation sale’

Lincraft had to clear up confusion on its Facebook page for customers who thought it was closing and have renamed it a “stock liquidation sale”. “We understand your concern! No, Lincraft is not closing. We’re currently running a clearance sale to make space for new products,” it wrote. 

Lincraft’s co-owner Brian Swersky told us “when we became aware of the potential for confusion we immediately modified the promotion to make it clear that it was a stock liquidation sale”.

Consumer member Elizabeth Samuel alerted us to Lincraft’s liquidation sale and said she’d been initially disappointed when she thought the store was closing, but then saw the retailer’s Facebook replies.  

“It feels like a ploy to get people into their stores quickly to avoid missing out,” Samuel said. She pointed out that the advertising used phrases to create urgency, including “it’s now or never” and “seize the chance”. 

Liquidation means it’s all over for a company and it’s being wound up, with its assets sold, debts recovered and creditors paid as far as they can be.  

We’ve let the Commerce Commission know about the sale’s name and sought its opinion on it. 

Kirsten Mannix, General Manager Fair Trading at the Commission, said businesses must not mislead consumers about the reason for a sales promotion.   

“Advertising a “liquidation” or “receivership” sale may imply that the business is closing down and consumers have a limited time to purchase the goods at a discounted price. If a business advertises a sale in this way, with no intention of closing, it may be breaching the Fair Trading Act," Mannix said.  

We think Lincraft should call the sale what it said it is on Facebook – a clearance sale. 

The Commerce Commission says the words “clearance sale” should also only be used to describe goods that won’t be available once a sale is over. If an item remains available at its original price after a sale, it was not on clearance.  

Lincraft is an Australian company and is also getting grief over the naming of the sale on the Lincraft Australia Facebook page.