Michael Hill Jewellers donates $10,000 to charity after WST over-charge

31 October 2000

Michael Hill Jewellers has donated $10,000 to the Starlight Foundation after over-charging Wholesales Sales Tax on watchbands, Acting Australian Competition and Consumer Commission Chairman, Mr Allan Asher, said today.

"The ACCC has been conducting extensive checking of retailers prices to ensure that the benefits of the removal of WST are passed onto consumers. In July 1999, the WST rate on watchbands was reduced from 32 per cent to 22 per cent. In July 2000 the WST rate on these products was reduced to zero and a 10 per cent Goods and Services Tax applied to the retail price.

"Michael Hill Jewellers advised the ACCC that due to computer errors it failed to pass on the WST reduction from 32 per cent to 22 per cent on watchbands sold through its stores.

"The ACCC's first priority was to ensure Michael Hill Jewellers passed on future WST savings to consumers. It sought assurances from Michael Hill Jewellers that the computer errors had been fully investigated and corrected before 1 July 2000.

"The ACCC acknowledges that there would have been a number of practical problems in refunding customers because of the size of the refund and the difficulty in identifying the individuals. Further, there would have been significant administrative costs. The ACCC is satisfied that the donation by Michael Hill Jewellers to the Starlight Foundation has effectively divested the company of any benefit it may have gained. Whilst such donations to charity are not an ideal remedy from a consumer protection perspective, the ACCC believes it is an appropriate resolution in the circumstances. The ACCC considers it unlikely that any affected consumer would object to the donation.

"In other matters the ACCC has proposed to businesses that they donate money to a charity to divest themselves of a GST over-charge. This is only appropriate where the refunds to each customer are very small and where steps are taken to advise customers generally of the donation, either through a corrective letter, corrective in-store notice or news release.

"However, the ACCC's first priority is always to ensure that consumers receive a full refund of any GST overcharge as soon as possible".

Release number: 
MR 289/00
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