$1.2 bn SPREE xmas BlOWOUT
Warning over discounts as Christmas bargain hunters break spending records.
The country’s Christmas shopping spend up is poised for a record-breaking year
Consumer watchdog calls for fresh investigation into buyers being ‘duped’ by fake discounts
Warning as Kiwis stretch the plastic creating a debt mountain
New Zealand’s consumer watchdog is calling for an investigation into retailers’ sales tactics in the lead-up to Christmas, saying consumers are being misled.
Just six shopping days remain until Christmas and consumers are heading for a record spend-up.
A staggering $1.29 billion was spent through the 100,000 terminals in the Paymark network in the first seven days of December, up more than $66 million on the same period last year.
Paul Brislen from Paymark said spending would peak on Christmas Eve with an anticipated 150 transactions a second.
Many are being lured by special deals as they try to bag a bargain to put under the tree.
But Consumer NZ says some of the biggest retailers are duping shoppers by marking up prices before discounting them.
“We’ve complained about this and we’d like the Commerce Commission to take a tougher line on it,” Consumer chief Sue Chetwin said.
“We’ve looked at sales items from [several retailers] and it’s really hard to see whether those items were ever at a price other than a sale price. It’s duping the consumers into believing they’re getting a bargain when what they paid is actually the price.”
A Consumer NZ study late last year tracked a number of sales items at major retailers for just over three months.
It found numerous examples of products marked as on sale for most of the 13 weeks.
“I think it would be useful if the Commerce Commission took a few more prosecutions and set some examples,” Chetwin said. “It is completely misleading.” Commerce Commission competition branch manager Stuart Wallace said the commission received a small number of complaints about retailers marking up goods then discounting them each year.
“It’s a recurring problem and it is global, but there are rules around that. We do investigate where we get evidence of that occurring. It is a matter we take reasonably seriously.”
Chris Wilkinson, managing director of consultancy First Retail, said the tactic became more prevalent around Christmas as firms tried to win the battle for shoppers’ dollars.
“If a retailer is not seen to be active and competitive and enticing the market, then they could be outside that consideration set for consumers.”
Wilkinson said he was aware of issues around sales tactics but it was hard to quantify how much it was happening.
“It’s a global thing that happens. “We’re not proud of it as a market but it happens, and not only in retail but in many other sectors as well.”
Retail NZ public affairs general manager Greg Harford said retailers were also under pressure to keep up with the international market.
Online shopping also meant consumers had a much broader range of options.
“It’s obviously important to generate a return on your sales so you can pay your staff, invest in your business and keep going,” Harford said.
Chetwin said the regulations need proper policing.
”[Retailers] are getting away with selling items, and attracting people into their stores thinking they’re getting a bargain, when what they’re selling them for is the actual price.”
Meanwhile, Credit Simple has reported a 17 per cent increase in credit applications in the past three weeks.
CEO David Scognamiglio said using credit could be a useful way of managing the cost of Christmas, but advised paying it back as soon as possible to avoid excess interest and damaging credit scores.
“It’s crucial to be smart about what you borrow, hunt for the best deal and make a solid plan to pay it off before you’re stung with interest and fees.”
Figures from Paymark show from December 1-7 New Zealanders spent $1289 million through eftpos and contact-less cards.
In Auckland, shoppers had tills ringing to the tune of $533.8m, up 5.8 per cent on last year’s $502.83m.