Back in July the Federal Court found Kogan guilty of creating fake discounts that are in breach of Australian consumer law. It has now handed the online retailer a $350,000 fine.
This penalty is in relation to a ‘Tax Time’ promotion that Kogan ran between June 27 — June 30 2018. This was found by the Federal Court to be misleading as Kogan raised the prices of 621 products before including them as part of a 10 per cent ‘discount’ offer.
The Australian Competition and Consumer Commission (ACCC) first began proceedings against Kogan on this issue back in 2019. The consumer watchdog found that Kogan raised the prices of these products by more than 10 per cent before the Tax Time ‘discount’ was applied.
At the time the ACCC said that the promotion was advertised on Kogan’s website and in emails send to 10 million customers. Texts were also sent to 930,000 customers.Customers were told to use the code ‘TAXTIME’ at checkout to get the 10% ‘discount’.
The ACCC also said that some of the emails included calls to action such as ’48 hours left!’ and ‘End midnight tonight!’.
“In many cases, consumers who used the promotional code to purchase these products paid the same as, or more than, they would have paid before or after the promotion,” ACCC Chair Rod Sims said in a press release.
“Consumers were not receiving a genuine 10 per cent discount as promised, and this affected high-value products such as Apple MacBooks, cameras and Samsung Galaxy mobile handsets.”
Justice Davies said in her judgement that the fine should act as a “strong signal to businesses like Kogan” to not try to entice constomers with fake discounts.
“Kogan’s contravening conduct must be viewed as serious, as misrepresentations about discounts offered on products not only harm purchasers acquiring such products on the basis that they are getting a genuine discount but also may impact on consumer confidence in discount promotions when legitimately made – that is, when products are being offered for sale with a genuine discount on price.”
Kogan has also been ordered to pay the ACCC’s costs for bringing forth the proceedings.
Kogan has been fond guilty of advertising misleading savings on several occasions. In 2016 it was fined $32,400 for increasing some prices before a Father’s Day Promotion.
Similarly in 2009 it had to modify its advertisements due to misleading savings claims on its website and in the Herald Sun.