IT Warehouse undertakes to improve its catalogue advertising

Computer and electronics retailer IT Warehouse Pty Ltd has signed court-enforceable undertakings with the Australian Competition and Consumer Commission to improve its catalogue advertising and its trade practices law compliance.

IT Warehouse is a partially franchised electronics retailer with 16 retail stores, mainly in South Australia and Victoria. Several editions of its promotional catalogues, particularly those of April and July 2004, advertised a number of Nikon digital cameras as being available for sale from its stores. However, many IT Warehouse stores had stock levels which were inadequate, or non-existent, and in any event were disproportionate to the discounted price and the level of the promotion.

The ACCC believed the representations in the catalogues were misleading and deceptive or likely to mislead or deceive customers, in breach of section 52 of the Trade Practices Act 1974.

"The ACCC was concerned that consumers would be misled into believing that IT Warehouse had stock of several models of specially discounted digital cameras available for immediate purchase, when this was not the case for many stores", ACCC Chairman, Mr Graeme Samuel, said today. "This was likely to be misleading because the catalogues inferred that IT Warehouse stores could readily supply items at the advertised prices, when they could not.

"This case should alert retailers who customarily do not have stock in hand or readily available, or where that is hardly ever the case, that they must tell consumers about the situation, especially when they promote the items in an attempt to gain a competitive advantage.

"The IT Warehouse catalogues inferred that the store could readily supply items at the advertised prices, when they had not yet got supply from wholesalers. In addition to potential consumer inconvenience, this advertising practice placed other retailers at an unfair competitive disadvantage with IT Warehouse".

IT Warehouse acknowledges that it may have contravened the Act. IT Warehouse has provided court-enforceable undertakings to:

• cease engaging in the alleged misleading and deceptive conduct
• inform all franchisees so that they are also made aware of the issues, and
• institute a trade practices law compliance program, including training for all its staff.