Harbin Pty Ltd, trading as Ray's Outdoors, had engaged in misleading and deceptive conduct over its Elizabeth store opening sale, the Federal Court has found.
In March 2007, Ray's Outdoors advertised in The Advertiser newspaper to promote a sale for the opening of its Elizabeth store in South Australia. It featured a Rio Grand barbeque for $99, with a strike-through price of $299.99.
The Australian Competition and Consumer Commission took action against Harbin, alleging that it engaged in false and misleading conduct.
The court found the advertisement misrepresented what customers would have paid for the barbeque immediately before the sale and what customers would have saved by buying it during the sale. Contrary to the price representation, the price paid by customers before the sale was less than the strike through price.
The Federal Court declared that Harbin had engaged in conduct that was misleading or deceptive, or likely to mislead or deceive, in contravention of section 52 of the Trade Practices Act 1974 and that it had made a false or misleading representation with respect to price in contravention of section 53(e) of the Act.
The court found that no one person at Harbin took ultimate responsibility for the pricing representations and Harbin accepted that there had been a deficiency in this area.
It ordered Harbin to put a corrective advertisement in The Advertiser and directed that a copy of the court orders be provided to the independent auditor of Harbin's compliance program. Harbin was also ordered to pay the ACCC's costs.
ACCC Chairman, Mr Graeme Samuel, said that businesses needed to take care that any price comparison advertising accurately conveyed the savings consumers could make from the sale.
"Advertised discounts must be real and not illusory. It is also important that businesses put systems in place to ensure advertising is accurate before it is released," he said. "This decision highlights the need for businesses to have a current trade practices law compliance program in place and to continue to review its systems for placing advertising."
For media inquiries to the ACCC Chairman, Mr Graeme Samuel, please call Ms Lin Enright, ACCC Media, on (02) 6243 1108 or 0414 613 520.
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