Increasing Price, then Offering a Discount is Misleading & Deceptive

Increasing price, then offering a discount is misleading & deceptive

 I find that retailers are constantly struggling between the push to drive sales and have the most attractive offers versus staying on the right side of the ACCC.  This is most prevalent in the area of was/is and comparative pricing.  This type of advertising has long been a focus for the ACCC and recently another large retailer has paid an infringement in this area.

Kogan is one of this decade’s biggest names when in Australian online retail, so was surprising to hear that yet another when large company has paid a penalty for false or misleading representations.

The ACCC recently reported that Kogan (Kogan.com Pty Ltd) paid $32,400 in penalties in response to three infringement notices issued by the ACCC on the grounds that the ACCC felt it had reasonable grounds to believe that Kogan made false or misleading representations about the price of computer monitors during a Fathers’ Day promotion on it’s eBay store.

Kogan was alleged to have increased the prices of some of its products prior to offering a 20% discount deal, when in fact, the increase meant that the “was/is” saving would only be 9% discount.

Working with a lot of retailers, I often see companies who make the mistake of employing a marketing team who is unaware of the details of misleading and deceptive conduct consumer law.  The law may seem straightforward, however in the pressure of meeting KPI’s and sales targets, it is easy to confuse “marketing tactics” with what is regarded by law as misleading and deceptive conduct.  Consideration should be given to:

  • How long should your items be on sale for before you can say they are price established? (ie the “was price”)
  • How long can your sale run for?
  • How often is it acceptable to change prices?

Kogan’s case is just another reminder to carefully analyse these questions and consider implementing some guidelines and company policies that your marketing team can adhere to.  Ensure that your marketing team is trained to understand relevant law before making any publications under your company name.

Gladwin Legal can provide staff training regarding misleading and deceptive conduct and other key marketing-related legal issues.  Give me a call today at 1300 033 934 or contact me by email at for a no-obligation chat.