Dodgy sales price tactics within Australia’s retail industry have created an environment where consumers need to be constantly on guard, an expert has warned.
The comments come after the ACCC announced on Thursday it had launched legal action against online electronics retailer Kogan.
The watchdog claims Kogan misled customers by offering a 10 per cent discount code only after raising at least 600 prices before the promotion.
Kogan has stringently denied the allegations, and said it would defend the proceedings.
While The New Daily does not infer the claims against Kogan are true, a retail and marketing expert said there were a host of tactics big-name retailers used daily to con consumers into thinking they were buying a bargain.
Deakin University retail and marketing lecturer Michael Callaghan said Australia’s retail landscape was largely self-regulated, leaving the task of keeping companies honest in the hands of consumers.
Dr Callaghan said raising prices before a sale was not an uncommon practice in the industry, and hoped the ACCC’s move against Kogan would put other companies “on notice”.
He further raised suspicions about the practices of one of Australia’s most well-known retailers.
He told The New Daily online forums were littered with anecdotes from shoppers who had seen in-store staff repricing products, only to notice the same outlet announce a sale shortly after.
“Magically, it’s so predictable that you will see a two-for-one deal or 20 per cent off sale (after staff have been seen repricing items),” Dr Callaghan said.
Confusion reigns supreme
Within Australia’s retail industry, there are laws that govern how long a product must be advertised for sale at a certain price for that price to be considered the ‘real retail price’.
That’s the price retailers can then advertise as having been discounted.
The problem, Dr Callaghan said, is that it has become commonplace – purposefully so – for stores to have rolling, constant sales.
This creates a situation where “no one – probably not even the retailers themselves – knows what the actual retail price is,” he said.
“This is why it’s unwise to walk into a shop and buy a product just because it’s on sale.”
Shoppers need to be on guard if they want to avoid being hoodwinked, Dr Callaghan advised.
As with any purchase, the key is research, research and more research.
“(Being) suspicious about prices is the best protection you can have,” Dr Callaghan said.
“Do your homework, Google prices, look at prices nationally. Most savvy consumers do their homework, shop around, and search online.
“It’s caveat emptor – buyer beware – at all times.”
He recommended website Ozbargain as a solid research tool, where shoppers contribute to forums that examine sale prices versus retail prices for various products from retailers across the country.
And if shoppers do see something that looks dodgy or amiss, they need to speak up.
“Consumers need to complain, they need to document these things and they need to complain loudly if industry practices are to be cleaned up – and they need to be,” he said.
Not just retail
Tricky tactics and price-gouging are apparent in any market where money is changing hands.
Earlier this year, after years of complaints, ticket reseller Viagogo was found guilty of misleading Australian customers.
The Swedish company was found guilty by the Federal Court of misleading customers by purporting to be an official retailer for tickets, while claiming events were close to selling out and then feeding its products into the market at bumped-up prices.
Energy retailers have also been told to lift their game and scrap late payment penalties that masquerade as “pay-on-time discounts”.