Michael Hill’s ‘special price’ put to the test

John Anthony goes shopping for a diamond ring and discovers that the art of haggling is alive and well in New Zealand.

I’ve haggled in some of the world’s most notorious marketplaces – and I can now add Auckland’s St Lukes Westfield to that list. I visited the Auckland shopping mall at lunchtime yesterday to experience the sales tactics of Michael Hill staff firsthand, and came away knowing how to get a 25 per cent discount on a $2000 ring that wasn’t marked with a sale price.

It started with a news tip from a woman who claimed she used to work at the jewellery chain. She alleged staff were encouraged to engage in some eyebrowraising sales strategies.

She made contact in response to a story on Thursday about a couple who bought a bracelet from Michael Hill and, without knowing it, a $149 extended warranty. The company was fined $169,000 for breaching the Fair Trading Act and misleading the buyers about the price.

The former employee, who wanted to remain anonymous, said she resigned from Michael Hill because of aggressive sales tactics.

The person said staff would not tell shoppers whether an item was on sale, so customers ended up paying full price.

‘‘If you like a piece of jewellery but say it’s out of your budget, they’ll say, ‘We’ll see what we can do’ and they go to the computer and come back with a ‘special price’ and if that’s still not in your budget, they’ll do it again until you buy it.’’

I wanted to test this theory so visited the nearest Michael Hill where I was warmly welcomed by a friendly saleswoman.

After exchanging some pleasantries, I spotted a ring without a sale price tag nestled among several other rings which were clearly on sale.

The woman pulled the ring out from behind the glass to inspect. It was 10 carat rose gold with a strip of diamonds totalling 0.34 carats.

A tiny price tag wrapped around it showed it was $1999. I said my budget was $1000 and asked if there was any room for negotiation on the price.

She went to check with her manager and came back with a $400 discount, which she later said was the ‘‘special price’’ despite it not being advertised. ‘‘We can do it for $1599,’’ she said. I reiterated that my budget was closer to $1000 so she went back to her manager, a few seconds later returning with her supervisor – a young man.

Again, I said my budget was $1000 to which he suggested I look at other ring options. But I insisted I was only interested in the one ring.

Then came the magic words: ‘‘I’ll see what I can do for you.’’

He darted off and came back seconds later with a further discount of $100 giving a final price of $1500.

I thanked them for the discount offer and told them I’d have a think about it. Then came the suggestions of buying it on hire purchase or using ‘‘buy now pay later’’ method Afterpay.

I told them I tried to avoid taking on debt.

‘‘There’s good debt and bad debt,’’ the manager said.

In my books jewellery falls into the latter, especially if bought at shelf price.

As for the movement on price, it looks like the art of haggling is alive and well in New Zealand, even at one of our most established retailers.

The jeweller’s response

A spokesman for Michael Hill said it did not charge customers full price for any products which were on sale, nor did customers need to ask whether an item was on sale to get the benefit of a sale price.

‘‘Sale items are either ticketed to show they are on sale or will ring up at the register to show they are on sale.

‘‘Michael Hill does not conceal the fact that an item is on sale.’’

Michael Hill also allowed its staff to carry out a certain degree of discounting on some of its products, it said.

‘‘In these instances, the ability to negotiate on a particular item is unique in every circumstance and takes into consideration a variety of factors including price and exclusivity.

‘‘We therefore strongly refute any allegations that our sales approach falls outside the boundaries of universally recognised retailing principles.’’

Then came the magic words: ‘‘I’ll see what I can do for you.’’

What’s the law?

Consumer NZ head of research Jessica Wilson said it was against the Fair Trading Act to mislead customers by not displaying the correct price.

‘‘Retailers can’t mislead customers about the price of goods,’’ Wilson said.

The maximum penalty for such an offence was $600,000, she said.

Generally it would be up to the Commerce Commission to investigate, she said.