Word of Advice

25 March 2008

Getting a fair deal in the summer sale season 

Easter is a sign that summer has drawn to an end and we are well on the way to cooler months. It’s also a time for businesses to make room on their shelves for new winter stock, by selling any left over summer items during the ‘end of summer sales season.’

With many stores promoting all kinds of sales during the summer months you might want to be sure you’re getting a true bargain. The Fair Trading Act prohibits misleading and deceptive conduct by traders. The Act has an impact on what traders can state about the goods and services they offer ‘on sale.’ It covers misrepresentations made in brochures or leaflets, in store displays and signs, as part of a sales pitch, and in TV, radio, newspaper and other advertisements.

What to look out for:

False or misleading advertising

If a store advertises an “everything 50% off” sale, then all its stock must be half price. If a store advertises “up to 50% off” or “10-50% off”, a reasonable number of items must be 50% off – not just one or two. This practice can be viewed as enticing you into the store by the use of misleading advertising.

When advertising a sale, the store should have reasonable stocks available of the reduced items. Advertising goods on sale without having sufficient stock to meet likely demand is called ‘bait advertising’ and, again, if this is the case, you may have been enticed into the store by misleading advertising. You shouldn't arrive one hour after the doors open on the first day of a sale, only to find that the store has only a few items reduced and these have already sold out.

When it comes to stating prices, the store must not mislead you about the true price relative to the sale price. It can't raise its prices before the sale and then quickly lower them again, making you think that you're getting a special when really the goods are the normal price. If a store advertises goods as “was $100 – now $75”, the normal price must be $100.

Fair Trading Act

The Fair Trading Act prohibits misleading and deceptive conduct by traders, and applies to all aspects of the promotion and sale of goods. If you believe the Fair Trading Act has been breached and you want to seek redress, your first port of call should be the trader. Go back to them and discuss the problem you have with their sale. You may be able to come to an agreement over how the issue can be resolved.

If you can’t come to a verbal agreement and want to take the matter further, write a letter to the trader. A letter may have more impact and be more effective than a phone call or visit.

What next?

If you’re unable to resolve the matter directly with the trader, you may choose to take a claim to the Disputes Tribunal. Depending on the nature of the breach you could seek an order for cancellation of the sale purchase, or a refund of the amount above what you should have been charged or compensation for the personal cost to you.

Before taking this step consider the amount of money involved, the cost to you and the strength of your claim from the evidence you have.

Report it to the Commerce Commission

If you believe the Fair Trading Act has been breached because that summer ‘bargain’ wasn’t what it claimed to be, report it to the Commerce Commission. The Commission, which enforces the Act, can not help you resolve your individual claim against the trader, but it may prosecute the offending business if it considers that a breach has occurred.

If reporting information to the Commission, be ready to provide information about the details of the breach, such as the name of the store, the nature of the breach (for example, misleading advertising) and copies of any evidence (for example, your receipt for the sale item or sale advertising material).

Want more information?

For more information on the Fair Trading Act and the Commerce Commission, visit the Commission’s website. Or visit us at the Ministry of Consumer Affairs website.