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28 May 2021

Strandbags charged over discount claims

Commerce Commission alleges the retailer’s special prices were misleading.

Retailer Strandbags is facing seven charges over price promotions that the Commerce Commission alleges misled consumers and breached the Fair Trading Act.

Strandbags has 28 stores and also sells through its website. 

The commission alleges that between July 2018 and January 2020 Strandbags routinely advertised products on “sale” when they were in fact being sold at their usual price or close to this price.

The store’s pricing practices included:

  • percentage discount claims, such as “40% off”, and savings amount claims, such as “save $50”
  • strikethrough pricing, where a higher price was struck out and replaced with a lower one
  • was/now pricing, such as “was $289 NOW $144.50”.

The commission alleges some products hadn’t previously been sold at the higher price claimed while others were on sale for so long that the prices could no longer be said to be special.

Prices of certain products were inflated before a promotion to make it appear there was a significant discount, the commission said.

The matter is now before the courts.

Strandbags isn’t the first retailer to be charged for misleading customers about discounts.

In 2017, Bike Barn was fined $800,000 for misleading “specials”.

In October 2020, Pak’n Save Mangere was fined $78,000 for its misleading price claims.

Any trader that misleads consumers about the price of a product breaches the Fair Trading Act and faces a fine of up to $600,000.

Our investigations have found products that are frequently promoted at so-called “special” prices.

Last year, we made a complaint to the Commerce Commission about price promotions at supermarkets.

We found some products were on promotion so often that consumers risked being misled about the savings they’re really getting.

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