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Online retail ... Australian online store Kogan, founded and run by Ruslan Kogan, paid ACCC infringement notices for allegedly misleading consumers about its discounts. Picture: Jake Nowakowski
AUSTRALIAN online electronics store Kogan has been fined more than $30,000 for artificially inflating discounts in its Fathers’ Day sale last year, raising the price of items by more than 10 per cent before discounting them.
The Australian Competition and Consumer Commission detailed the company’s alleged deception today, revealing Kogan.com paid infringement notices related to computer monitors it sold from its eBay store in August last year.
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The consumer watchdog said it had “reasonable grounds to believe†Kogan first raised the prices of three computer monitors, then advertised a 20 per cent discount during its Fathers’ Day promotion.
Consumers actually only received a nine per cent discount from the original price, the ACCC said.
ACCC penalties ... Kogan's listing for a 27-inch (68.5cm) computer monitor. The company was fined for selling it and two other monitors at a discount only after raising their prices.Source:Supplied
The ACCC said the prices of the screens — the Kogan 27-inch Cinema Display WQHD, Kogan 28-inch 4K LED Monitor, and ASUS 27-inch LED Monitor PB278Q — returned to their original price shortly after the eBay promotion ended.
“It is simply unacceptable for businesses to raise prices before applying a discount in order to give consumers the misleading impression that they are obtaining a larger percentage discount than is actually the case,†ACCC acting chair Dr Michael Schaper said.
“Truth in advertising and consumer issues in the online market place are both current enforcement priorities.â€
Kogan’s payment of $32,400 to the ACCC is not considered an admission that it broke Australian Consumer Law, and is based on just three items from its 30,000-strong catalogue.
But the ACCC previously raised concerns about Kogan’s advertisements in 2009, saying Kogan advertised discounts on prices it had not actually offered.
The company then agreed to an undertaking that it would “not offer or advertise any goods as being on sale, by reference to a price, unless those goods have been offered for sale or sold at the higher price in reasonable quantities for a reasonable amount of time within a reasonable period of the date of the offer or advertisementâ€.
Kogan has been contacted for comment.