When is a sale not a sale?
OPINION: Ever had the feeling it’s always sale season at some retailers? Discount deals and special offers have become such a regular feature of the retail scene.
It’s possible to find products that never seem to be sold at anything other than a sale price. That discounted espresso machine you raced out to buy might still be on special a month later.
There’s no denying price promotions can benefit consumers – who doesn’t want to bag a bargain?
But the prevalence of special offers raises good grounds to ask whether the savings are all they’re cracked up to be.
Stores tempting customers with specials must be offering a genuine deal. If they’re not, they risk misleading consumers and breaching the Fair Trading Act.
Bike Barn is facing 16 charges relating to ad campaigns the Commerce Commission alleges misled consumers about the store’s sale prices. The campaigns included ads for bikes marked as ‘‘half price’’ even though they were usually sold at that price. Bike Barn is expected to plead guilty to the charges.
However, working out whether a special price is all that special can be a tough ask for consumers. Products may need to be regularly tracked to find the answer, an unrealistic exercise for most of us.
The commission’s pricing guidelines caution products should be sold at the ‘‘normal’’ price for a reasonable time before going on special. What’s reasonable will depend on the circumstances, it says.
Elsewhere, expectations are clearer. In the United Kingdom the normal price used as the comparison for special offers should have been available for at least 28 consecutive days. If the same rule of thumb was applied here, it’s likely many retailers would fall short.
Our latest supermarket price survey found some products on special most weeks. During the seven weeks we collected data, more than half the 30 items in our basket were regularly discounted.
The supermarkets point to their regular specials as a sign shoppers are getting good deals. They also say prices need to be viewed over a year, not just seven weeks.
But that’s not a job the average consumer can take on.
It’s time to turn the spotlight on special offers. Retailers know consumers are more likely to open their wallets if it looks like they’re getting a bargain.
But consumers should be able to trust the claimed savings are the real deal.
How long can a sale last?
A sale must be a genuine opportunity for consumers to buy at a discounted price. It should be for a short period and the start and end dates should be clear. The reason for the sale must also be genuine. For example, a retailer who advertises regular ‘‘closing down’’ sales but has no intention of closing is likely to fall foul of the Fair Trading Act.
If a retailer advertises a sale, should all goods be discounted?
Retailers should clearly disclose any items excluded from the sale. Any limitations must also be clear, for example, if there is limited stock available or a limit on the number of purchases per customer. Retailers also risk misleading consumers if they claim there’s a discount on stock ordered specifically for a sale.
Sale goods are often compared against the ‘‘recommended retail price’’. What is it?
A recommended retail price (RRP) is the price suggested by a manufacturer for its products. But it’s illegal for manufacturers to demand retailers sell at this price and stores are free to set their own prices. Retailers making comparisons between an RRP and their selling price must be careful they don’t mislead consumers. If the RRP is not a genuine indication of the usual price of the good, consumers are likely to be misled about the savings available.
Are signs saying ‘‘No refunds on sale items’’ legal?
No. If you find a defect in a sale item after you buy it, you have the right to return it and ask for it be fixed. The same applies to ‘‘seconds’’ (goods sold as damaged). However, you can’t complain about the defect that made the product a second if you were told about it prior to purchase.
Sue Chetwin is the chief executive of Consumer NZ. For thousands of independent test results and research on a range of products and services, go to consumer.org.nz.