New Zealand Commerce Commission alerts retailers over misleading pricing


New Zealand's competition enforcement agency, the Commerce Commission, has alerted warning retailers over misleading pricing.

An open letter highlighting pricing practices that might breach the law has been published after it received complaints about pricing last year.

Commerce Commission commissioner Anna Rawlings said: “Consumers look out for sales and we know that sales can drive competition among retailers and value for consumers.

“However, when price claims are not accurate and discounts are exaggerated, consumers do not get the ‘bargain’ they believed they were getting. It is also unfair to other retailers who are offering genuine special prices and pricing their goods accurately.”

The agency has also observed that few retailers are using price promotions to drive sales.

The letter calls on retailers to ensure discounts are deducted from the usual selling price, and not to use fine print to hide important information such as extra charges.

"When price claims are not accurate and discounts are exaggerated, consumers do not get the ‘bargain’ they believed they were getting."

It also highlighted that ‘clearance’ sales are only for clearing goods and retailers must not exaggerate savings to be made or the range of discounted goods available.

The commission warned retailers to be careful with claims such as 'lowest' and 'cheapest' prices.

The letter also alerted traders about the recent $800,000 fine imposed on two Bike Barn companies for misleading discount claims.

Last year, Trustpower was fined $390,000 for misleading advertising about pricing and applicable contract terms.