Strand fined for fake discount claims after NZ regulatory probe
Trans-Tasman retailer Strand formerly known as Strandbags has been fined $780,000 (AU $709,246) in the Auckland District Court after being convicted of misleading consumers over discounts.
A Commerce Commission investigation found that between 2018 and 2020, the handbag retailer routinely advertised its products as if they were “significantly discounted or being sold at special prices” when they were not.
Commerce Commission chair Anna Rawlings said the business’ discounting practices were responsible for misleading consumers into thinking a “greater saving was on offer” while creating a false sense of urgency.
Strand used ‘was/now’ pricing tactics – such as “was $289, now $144.50”, strikethrough pricing, and promoted percentage discount claims along with claimed savings amounts when advertising products.
“We found prices of certain products were artificially increased prior to the sale, in order to make the discount seem more significant. Other products had been repeatedly discounted,” said Rawlings.
Judge Ryan said the retailer’s repeated discounting was “highly careless” bordering on reckless. He also agreed with the commission that breaching the Fair Trading Act was “integral to Strandbags’ profitability”.
Rawlings cautioned businesses that bargains offered should be genuine, unambiguous and not promoted in a way that “entices” consumers.
“With Black Friday and Christmas around the corner, we are urging businesses to review their processes and the deals on offer.”