Online retailer Kogan has been found guilty of creating fake discounts that are in breach of Australian Consumer Law.
Kogan fake tax time discounts
The Federal Court has found that Kogan ran a misleading promotion between June 27 — June 30 2018. The Australian Competition and Consumer Commission (ACCC) first began proceedings against Kogan on this issue back in 2019.
The ‘Tax Time’ promotion saw Kogan raise the prices of more than 600 products before proceeding to include them in a 10% ‘discount’ offer. The ACCC found that most of these products had been raised by more than 10% before the fake discount was applied.
According to the ACCC, Kogan advertised the promotion on its website, in emails sent to 10 million customers and via SMS to more than 930,000 customers. Customers were told to use the code ‘TAXTIME’ at checkout to get the 10% ‘discount’.
The ACCC states that some of the emails included calls to action such as ’48 hours left!’ and ‘End midnight tonight!’.
“We brought this case because we were concerned that the advertised price reductions were not genuine savings,” ACCC Chair Rod Sims said in a press release.
“All businesses must ensure that their advertisements do not mislead consumers about the nature of a promotion, and that any promised savings are genuine.”
A hearing on the penalties will be held at a later date.
This seems familiar…
This isn’t the first time that Kogan has been found guilty of false or misleading promotions. In 2016 it was fined $32,400 for increasing some prices before a Father’s Day Promotion.
And back in 2009 Kogan was forced to modify its advertisements due to misleading savings claims on its website and in the Herald Sun.
Here’s the full press release from the ACCC regarding today’s announcement:
The Federal Court has found online retailer Kogan Australia Pty Ltd (Kogan) breached the Australian Consumer Law by making false and misleading representations about a tax time sales promotion, in proceedings brought by the ACCC.
Kogan ran the online promotion from 27 to 30 June 2018, advertising to consumers that they could use the code ‘TAXTIME’ to reduce prices by 10 per cent at checkout. The promotion was advertised on Kogan’s website, in emails it sent to more than 10 million consumers, and in SMS messages to more than 930,000 consumers.
Towards the end of the promotion, Kogan’s email advertisements also included statements like ‘48 hours left!’ and ‘Ends midnight tonight!’ to entice consumers to make a purchase during the sale.
The Court found that the advertisements conveyed false or misleading representations because Kogan had increased the prices of more than 600 of its products immediately before the promotion. In most cases the prices of these products had been increased by at least 10 per cent. Kogan had also reduced the prices of these products shortly after the promotion ended, many back to their pre-promotion prices.
“We brought this case because we were concerned that the advertised price reductions were not genuine savings,” ACCC Chair Rod Sims said.
“Many consumers who took up the offer on one or more of the 600 or so products in many cases actually paid the same as, or more than, what they would have paid immediately before and after the promotion.”
“All businesses must ensure that their advertisements do not mislead consumers about the nature of a promotion, and that any promised savings are genuine,” Mr Sims said.
A hearing on relief, including penalties, will be held at a later date. The ACCC is seeking declarations, injunctions, pecuniary penalties, corrective notices and costs.