Bevilles Jewellers has acknowledged that its two-price advertising of some jewellery items may have been misleading.
From September 2005 to June 2006 Bevilles Pty Ltd, a jewellery retailer operating 24 stores located in Victoria, New South Wales and South Australia, published and disseminated a number of catalogues in which some jewellery items were advertised with two prices, a high price struck through with a line above a more prominent lower price.
For example:
50% Off$399.95$199. 95
The Australian Competition and Consumer Commission investigated the advertising as part of a joint state and territory Offices of Fair Trading monitoring of jewellery advertising in the lead up to Mother's Day 2006.
Based on sales information provided by Bevilles the ACCC was concerned that the two-price advertising of some items misrepresented, in breach of the consumer protection provisions of the Trade Practices Act 1974, the usual selling price of the item immediately preceding publication of the catalogue, and also the amount of savings available to consumers who purchased the item during the catalogue promotion.
In response to the ACCC's concerns, Bevilles has provided the ACCC with court-enforceable undertakings to:
- not engage in two-price advertising of jewellery items unless the higher price is no greater than the price at which Bevilles most frequently sold the item in the eight weeks prior to the promotion or, where Bevilles had not made any sales, it had offered the item for sale at the higher price in the eight weeks prior to the promotion
- distribute a correction notice to residential letterboxes in the regions in which Bevilles' April/June 2006 catalogue was distributed, and display the correction notice within its stores and on its website, and
- implement a trade practices compliance program that includes complaints handling procedures and practical trade practices training for its employees.
"Businesses need to be particularly careful should they engage in price comparison or two-price advertising that they do not overstate the level of savings on products," ACCC Chairman, Mr Graeme Samuel, said today.
"Price is at the heart of competition and misrepresentations about price and the level of savings not only mislead consumers in their purchasing decisions but is unfair competition and harmful to competitors.
"The ACCC has been active in urging businesses, including in the jewellery industry, to be wary should they choose to engage in two-price advertising that they do not misrepresent prices and potential savings. It will continue to monitor such advertising to ensure compliance with the law.
"In the lead up to Mother's Day 2007 the ACCC and the state and territory Offices of Fair Trading again monitored two-price advertising in this industry."
In December 2006 the ACCC began court proceedings against two retail jewellery chains, Zamels and Prouds, for alleged misleading two-price advertising conduct.
The proceedings against Prouds have been set down for hearing in the Federal Court in Sydney on 23 and 24 July 2007, and the Zamels hearing is due to begin in the Federal Court in Adelaide on 22 October 2007.