Consumers cautioned against unrealistic bargain offers

Staff Reporter

Staff Reporter

Auckland, November 26, 2020


Commerce Commission Chairperson Anna Rawlings (From CC website)


The Commerce Commission has cautioned retailers and consumers to carefully consider the bargains being offered as ‘Black Friday to think hard about the bargains being offered as ‘Black Friday’ and Christmas draw near.

The Black Friday Concept

The day following Thanksgiving (celebrated in the US on the fourth Thursday of November), commonly referred to as Black Friday, has become one of the busiest shopping days of the year.

National chain stores traditionally offer limited money-saving specials on a wide variety of goods in an effort to lure shoppers into stores while offering similar deals online.

It is believed by many that the term ‘Black Friday’ derives from the concept that businesses operate at a financial loss, or are ‘in the red,’ until the day after Thanksgiving, when massive sales finally allow them to turn a profit, or put them ‘in the Black.’

However, this is untrue.

Boxing Day overtaken

Commerce Commission Chairperson Anna Rawlings said that Black Friday has overtaken Boxing Day in terms of retail spending in New Zealand.

She quoted data from electronic payments company Paymark.

“Last year Kiwis spent more than $650 million (core retail spending, excluding food and hospitality) over three days around Black Friday and we know that there is a lot of marketing about bargains, sales and discounts on Black Friday and in the lead up to Christmas. We want consumers to get the bargains that they are promised. We are reminding retailers to make sure that advertised savings are genuine savings and we are reminding consumers to do their research, shop around, and check to make sure that they get the deal they think they are getting,” she said.

The Commission has provided resources for consumers and businesses, including a video about pricing and a price promotion tip sheet for retailers, and a Christmas sales advice video for consumers, she said.

“For example, if a business claims a price is 50% off then their customers should save 50% off the usual selling price. Businesses should not bump up prices ahead of a sale in order to claim a bigger discount at sale time. Fine print should not be used to hide important information or change the meaning of a headline offer. As our recent prosecution of Pak N Save Mangere shows, businesses must also ensure the price displayed and advertised is the price charged at the checkout,” Ms Rawlings said.

She said that consumers should do some price comparison research.

“Get an idea of the price you could usually expect to pay for an item and then satisfy yourself that the saving you are offered is a real. Ultimately, ask yourself whether the price you are asked to pay looks like good value to you, regardless of whether it is discounted or on sale,” Ms Rawlings said.

Recent price-related cases undertaken by the Commerce Commission include (a) Pak N Save Mangere was fined $78,000 for pricing discrepancies in October 2020 (b) Online mobile phone store Buy Mobile was warned over its price discount claims (August 2018) and (c) Bike Barn was fined $800,000 for misleading pricing (February 2017).

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