Noel Leeming should have been more cautious about delivery promises: Commerce Commission

Wednesday, 16 December 2020

Retail chain Noel Leeming has received an official warning from the Commerce Commission for selling products that it did not have in stock.

The commission issued the warning after an investigation into the retailer for making delivery representations without reasonable grounds during the Covid-19 crisis.

As of November 26, the commission had received 125 complaints about Noel Leeming which related to delivery time, non-delivery or alleged bait advertising.

The commission’s investigation focused on the sale of two products that the electronics chain did not have in stock.

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In the commission’s view, Noel Leeming was likely to have breached the Fair Trading Act by accepting payment for 37 Amazon Kindle 4GB 2019 tablets on April 5 and 6 when it had no remaining stock to fulfil these orders.

Noel Leeming removed the Kindles from sale on April 6, then told customers of the situation and offered a refund on April 16.

The commission also believed that Noel Leeming was likely to have breached the act on June 26 and on July 2 by advertising a DJI Ronin-SC Control Cable with a one to two week timeframe for expected delivery despite having an overdue existing order and not taking any steps to establish with its supplier the reasons for the delay, availability of the product or expected delivery timeframes.

Commerce Commission chairwoman Anna Rawlings says while the Covid-19 crisis was unprecedented, Noel Leeming should have been more cautious about what it promised customers.

Over the past 12 months, Stuff has received multiple complaints from shoppers who say they have been left weeks without products they had paid for at Noel Leeming.

Commission chairwoman Anna Rawlings said Noel Leeming faced unprecedented consumer demand and delivery services were significantly impacted at this time.

“However, it should have taken a more cautious approach to representations it made about product availability and delivery timeframes”.

During the different Covid-19 alert levels, consumers had reduced ability to shop around for available or alternative products, Rawlings said.

“Consumers were, therefore, heavily reliant on representations about availability and delivery times,” she said.

Noel Leeming fully co-operated with the commission’s investigation and it has advised the commission that it has since amended its approach to delivery representations.

This is not the first time Noel Leeming has been under investigation by the commission.

In 2018, the commission took legal action against Noel Leeming, alleging it misled customers about policies on faulty goods.

Noel Leeming was ultimately fined $200,000 for breaches of the Fair Trading Act.

The fine followed an investigation into complaints from Noel Leeming customers who said they were misled about the right to seek remedies for faulty goods, the right to seek a refund for a faulty product, and the right to seek replacement of a faulty product.

The complainants bought, or were going to buy, items such as mobile phones, laptops and household appliances.