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Pricing practices misleading shoppers

Misleading pricing practices have prompted the Commerce Commission to remind retailers of their Fair Trading Act obligations.

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In an open letter to retailers in May, the commission warned stores the act prohibits misleading pricing and traders can be fined $600,000 if they break the law.

We’ve welcomed the commission’s announcement it’s focusing on pricing practices. Consumer NZ chief executive Sue Chetwin says constant sales and exaggerated discounts are prevalent in the retail trade.

“Our investigations have found stores routinely promoting the same items as ‘specials’, giving consumers a misleading impression about the savings available. If a product is regularly discounted, the retailer can’t claim a reduced price is all that special.”

Ms Chetwin says special offers are so pervasive that more than half the products in its 2016 supermarket price survey were regularly on promotion.

In 2015, we also tracked prices for selected products at Farmers and Briscoes for 3 months and found items that were on “special” almost every week.

At Farmers, an $800 espresso machine was on “special” for 12 of the 13 weeks prices were tracked. For most of the period, it was priced at $560.

“Retailers use ‘special offers’ to lure customers with the promise of a bargain. These offers make it look like you’re getting a discount but products can be on special so often the savings aren’t really genuine,” Ms Chetwin says.

Consumer NZ has called for regular price monitoring to ensure consumers aren’t being duped by “specials”.

Stores advertising special offers must be offering a genuine deal. “Price promotions can save consumers money. But we’ve found products being discounted so often, shoppers have grounds to question whether the specials are really all that special,” Ms Chetwin said.

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