Ezibuy's weekly sales raises questions over what a sale really means

Thursday, 10 October 2019

Commerce Commission warns retailers about over pricing (video first published in October 2019).

Ezibuy's regular promotions of 'one-day-only' sales could potentially mislead customers, Consumer New Zealand says.

Over the last two months, clothing and homeware retailer Ezibuy has held at least six different 'one-day only' or weekend-long sales offering between 30 per cent and 40 per cent off full-priced clothing.

This was on top of an ongoing sale offering up to 60 per cent on selected items.

Consumer's head of research Jessica Wilson said a sale had to be a genuine opportunity to get a discount, otherwise the retailer risked misleading customers and breaching the Fair Trading Act.

'If an item is routinely on sale, then the so-called 'sale' price is really just the usual selling price,' Wilson said.

Ezibuy could be pushing the boundaries of the Fair Trading Act by its very regular 'sale' promotions.

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In the messages, the sales were described as 'flash sales' and customers were encouraged to shop quickly so that they did not miss out on the 'best selection'.

Wilson said 'advertising several 'one-day only' sales in the same month for the same item would risk misleading consumers about the discount they were getting.

Ezibuy was bought by Australian investment firm Alceon Group in 2017.

The company has been approached for comment.

A Commerce Commission spokesman said there have been four complaints against Ezibuy for sale practices since 2014.

Ezibuy is offering weekly sales on clothes, but is it a breach of the Fair Trading Act?

'It is an offence under Section 13(g) of the Fair Trading Act to make a false or misleading representation as to the price of goods or services,' the spokesman said.

'Any claims made about price must be clear, accurate and unambiguous. If retailers offer goods at a discount, the goods must previously have been offered to the public at the regular price for retailers to accurately claim the goods are now discounted.'

The commission has identified misleading pricing as one of the biggest issues they dealt with.

In 2017, Bike Barn was fined $800,000 for 'exaggerated discounts'.

'As Judge Sharp noted, the offending was calculated and consumers were disadvantaged by false statements, competitors may have been disadvantaged, but the real impact of these offences was that the public were entitled to be protected against things that give impressions that are not correct,' a commission spokesperson said.

The commission also filed 45 charges against Bunnings Warehouse in 2017 for its various 'lowest price' claims.

At the time, commissioner Anna Rawlings said consumers were looking out for sales and sales could drive competition between retailers.

'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,' she said.

'We are observing that some retailers' marketing strategies place significant reliance on the use of price promotions to drive sales. We are concerned that some retailers may be misleading consumers about the savings that they offer.'