The Federal Court has ordered Kogan Australia to pay $350,000 for making false or misleading representations about a tax time sales promotion.
In July 2020, the Court found that Kogan had misled consumers by advertising over a period of four days that they could use the code ‘TAXTIME’ to reduce prices by 10% at checkout, when Kogan had increased the prices of 621 products immediately before the promotion.
In most cases, the prices of these products had been increased by at least 10%.
Kogan then decreased those prices soon after the promotion ended, many back to their pre-promotion prices.
Kogan made these statements to consumers in June 2018 on its website, via emails sent to over 10 million consumers, and by SMS messages to over 930,000 consumers.
“In many cases, consumers who used the promotional code to purchase these products paid the same as, or more than, they would have paid before or after the promotion,” ACCC Chair Rod Sims says.
“Consumers were not receiving a genuine 10 per cent discount as promised, and this affected high-value products such as Apple MacBooks, cameras and Samsung Galaxy mobile handsets.”
Towards the end of the promotion, Kogan also used statements such as ‘48 hours left!’ and ‘Ends midnight tonight!’ in some emails to consumers, to create a sense of urgency to entice consumers to make a purchase during the tax time promotion period.
In her judgment, Justice Davies said: “Kogan’s contravening conduct must be viewed as serious, as misrepresentations about discounts offered on products not only harm purchasers acquiring such products on the basis that they are getting a genuine discount but also may impact on consumer confidence in discount promotions when legitimately made – that is, when products are being offered for sale with a genuine discount on price.”
Sims says the judgement sends a "strong signal" to businesses like Kogan which conduct regular online sales promotions that they must not entice customers with promises of discounts that are not genuine.
The court also made declarations and ordered Kogan to pay the ACCC’s costs of the proceedings.
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