Snooze admits two-price advertising likely to mislead

19 November 2009

Bedding retailer Snooze has admitted that its October 2008 advertising campaign was likely to mislead or deceive customers about the savings they would obtain on its products.

Snooze owns and manages 70 Snooze bedding retail stores across Australia.

During Snooze's October 2008 campaign, many of their products were priced in stores by 'two-price' advertising in the form 'Was/Now'.

The ACCC conducted a proactive audit of 'two-price' advertising in bedding retail stores and discovered that a number Snooze's bedding products had been offered for sale or sold by Snooze for a cheaper price than their stated 'Was' price.

Snooze admits the 'Was' prices were actually a reference to their own internally-set recommended retail prices, rather than the price at which the products were offered for sale or sold for a reasonable period immediately before the October campaign.

Snooze admits that its 'Was/Now' pricing was likely to have misled or deceived consumers in breach of the Trade Practices Act 1974.

It will write an apology letter to customers known to have purchased a product promoted by 'Was/Now' pricing during the campaign and offer a $50 gift voucher.

"Two-price advertising can make a sale price seem more attractive to consumers, but where the 'was' price is false or inflated, customers can be misled," ACCC chairman Graeme Samuel said today. "Such advertising places businesses at serious risk of breaking the law.

"An advertised higher price must be genuine and have applied prior to the sale for a reasonable period of time."

Upon being made aware of the ACCC's concerns, Snooze stopped the conduct and has offered court-enforceable undertakings.  In addition to the apology letter and gift voucher the undertakings include displaying corrective notices in Snooze stores; publishing an information notice in FB Magazine; and establishing a trade practices compliance program.

New ACCC guidelines on price comparison or 'two-price' advertising are now available on the ACCC's website.  Business groups seeking multiple printed copies should contact the ACCC Infocentre on 1300 302 502.

Customers who consider that they may be eligible to receive a gift voucher but have not heard from Snooze by 2 December are invited to contact them on (03) 9830 4081 with their inquiries.

Links

  • Price comparison advertising, News for business (link removed as item has been retired)
Release number: 
NR 285/09
ACCC Infocentre: 

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