Consumers fight back on ‘discounts’

We’re a sales nation with a culture of ‘‘deep’’ retail discounts rarely seen overseas.

Big-name stores commonly advertise discounts of 40, 50 and 60 per cent.

But discounts so deep need to be approached with caution, and shoppers are being urged to join the global ‘‘purposeful’’ consumer trend to help decipher them.

‘‘Our deep and sustained discounting is quite unique to the New Zealand market,’’ retail consultant Chris Wilkinson from First Retail Group said.

‘‘In the UK, 25 per cent is a big discount.’’

Just how much you can trust the scale of some of the larger discounts is a contentious subject.

‘‘Marking up to mark down is a big issue,’’ Wilkinson said.

Marking up is the practice of a retailer putting an unrealistically high price on items which can later go on ‘‘sale’’.

But armed with a mobile phone, the purposeful consumer can research and price-check items, cutting through the sales hype.

A purposeful consumer shopping for a Philips Aquatouch Multiprecision Series 5000 S5420 shaver on Wednesday would have found Briscoes selling it for $200, or 50 per cent ‘‘off’’ the normal price.

Although that might sound like a discount to get excited about, Smiths City had the same shaver ‘‘on sale’’ for $179.99, while Heathcotes was selling it for $177, making no mention of it being on sale. Magness Benrow was selling it for $199, marked down from $399.99, and Harvey Norman was selling it for $139.

Wilkinson said there was a global trend for ‘‘purposeful’’ purchasing enabled by mobile phones and tablets.

It could reduce the chance of being caught in the dispiriting trap of paying full price for an item, only to find it discounted the next day.

Wilkinson himself bought a Dyson vacuum before Christmas only to see more than $100 shaved off the price in the Boxing Day sales.

Understanding what a discount really means can involve having to read the fine print.

Torpedo7, for example, calculates its sales discounts from its ‘‘regular’’ price, but many Torpedo7 customers never pay the regular price.

The business encourages all shoppers to sign up for its ‘‘club’’ at the till by providing a name, an email address and a phone number.

On December 22, Torpedo7 was advertising its 3x3 Gazebo Tent Sandbag (single) for $11.99 at a 40 per cent discount to its regular price, which was $19.99.

However, its ‘‘club’’ price immediately before the sale was $15.99, just 25 per cent higher than the sale price.

The Commerce Commission said discounts must be calculated off the ‘‘usual’’, ‘‘normal’’ or ‘‘everyday’’ price. A business might mislead consumers if it had never charged that price, had deliberately inflated the everyday price, or if the claimed usual price was ‘‘one of many prices at which the business commonly sells the good or service’’.

A spokeswoman for Torpedo7 said: ‘‘Our regular price is the equivalent of what the Commerce Commission refers to as ‘usual’, ‘was’, ‘normal’ or ‘everyday’ price.’’

She said the majority of customers opted to pay higher prices and not join the club.

Wilkinson said ‘‘nirvana’’ for retailers was to have exclusive ranges of products, making direct price comparisons impossible, but intense pressure, rapid product cycles and sudden market disruptions meant pricing was ‘‘dynamic’’.