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Retailers warned over misleading pricing

NZ Newswire logoNZ Newswire 11/05/2017

Kiwi retail outlets may be breaking the law by holding frequent or disingenuous sales and exaggerating discounts, the Commerce Commission says.

The regulator says concerns with how products have been priced was the most common complaint it received in 2016 and that bicycle seller Bike Barn was recently fined $800,000 for misleading pricing.

Commissioner Anna Rawlings says buyers are on the look out for sales and that when retailers use them legitimately it can help drive competition among stores.

"However, when price claims are not accurate and discounts are exaggerated, consumers do not get the 'bargain' they believed they were getting," she said.

"It is also unfair to other retailers who are offering genuine special prices and pricing their goods accurately."

Ms Rawlings said her team had on Thursday written an open letter to retailers, saying it wanted to avoid misleading pricing practices primarily by educating shop owners on what is acceptable.

But she also warned the commission would prosecute those who violated consumer laws.

She cited how Bike Barn was fined in court in February for falsely giving customers the impression they were buying bikes at significant mark-down prices and that the discounts were available for a limited time only.

The $800,000 fine was one of the largest handed down under the Fair Trading Act in New Zealand, while Trustpower was also fined $390,000 last year for advertising that contained misleading prices.

Lobby group Consumer NZ backs the Commerce Commission and is calling for a regular price monitoring system to be set up to protect consumers.

It says it is also investigating the way products are priced and during studies of supermarkets and homeware stores in 2015 and 2016 believed special offers and sales had been advertised too frequently.

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