Kogan is set to pay a fine of $350,000 for 'misleading tax time promotion', the ACCC has reported.
The Federal Court has ordered Kogan Australia Pty Ltd to pay a penalty of $350,000 for breaching Australian Consumer Law for its ‘Tax Time’ promotion.
In July 2020, the Australian Federal Court found that Kogan ad ‘misled customers’ by advertising over a period of four days with the code ‘TAXTIME’, to discount prices by 10 percent at the checkout. However, Kogan had increased the prices of 621 products immediately before the promotion, The Court has reported.
According to the Court, in most cases, Kogan had increased these prices by ‘at least’ 10 percent, then decreased them soon after the promotion had ended. This promotion occurred in June 2018, and was shared to the member database via email to more than 10 million consumers and SMS messages to more than 930,000 consumers.
Furthermore, CTAs were made such as ’48 hours left!’ and ‘Ends midnight tonight!’ in emails to 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,” explained Rod Sims, the ACCC Chair.
“Consumers were not receiving a genuine 10 percent discount as promised, and this affected high-value products such as Apple MacBooks, cameras and Samsung Galaxy mobile handsets,” he said.
An example of Kogan’s TAXTIME sale – courtesy of the ACCC
“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,” said Justice Davies on the issue.
The Court has also declared that Kogan pays the ACCC’s costs of the proceedings, the report found.
“This decision sends a strong signal to businesses like Kogan, which regularly conduct online sales promotions, that they must not entice consumers to purchase products with a promise of discounts that are not genuine,” Sims concluded.
Like this story? Click here to find out more about Power Retail E-Commerce Intelligence or here to sign-up for the free weekly Pulse Newsletter for more essential online retail content.