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Consumer & Business Advice
Media releases
3 December 2014

South Australian consumers can shop easier now that our businesses have received an A- grade in a national blitz to scrutinize cash-back offers and ‘was/now’ pricing.

Fair trading regulators across Australia have been looking into the business practices in two national compliance operations.

Business Services and Consumers Minister Gail Gago said the vast majority of South Australian businesses were doing the right thing.

“Consumers have the right to expect that advertising is truthful and promotions are offered in good faith.

“Businesses generally appear to be taking their Australian Consumer Law obligations seriously, and should be congratulated for that.

“Fair trading regulators will continue to perform unannounced and covert checks to ensure it stays that way,” Ms Gago said.

As part of the national operation, a team of compliance officers targeted major retailers in South Australia, as well as online outlets, looking at offers on products from fridges and kitchen appliances to mattresses and vacuum cleaners.

“There were only five occasions where the officers had to ask for evidence from the retailers that their advertised ‘was/now’ prices and cash-back offers were legitimate.

“Pleasingly for consumers, each of the retailers was able to demonstrate the truth of their claims, and these operations serve to remind retailers of their obligations,” Ms Gago said.

“Businesses should keep in mind that if they’re claiming an item was $200 and is now on sale for $140, they must be able to produce proof that the product was actually previously sold for
$200, for example with copies of old advertisements or sales data.

“Businesses also need to be wary of using recommended retail price (RRP) to infer a discount, especially where the RRP is inflated and it is doubtful the product would ever be sold at that price,” Ms Gago said.

‘Was/now’ pricing is where a business displays a previous higher price, along with the current lower price, to demonstrate a discount.

Cash-back offers are where a business offers to return some of the consumer’s money after purchase, rather than discounting the product itself.
 
“The key for consumers is to ask about the terms and conditions of the cash back offer, including whether the money will be paid in cash, directly transferred to a bank account or given as a pre-loaded debit card or gift card.

“Businesses need to ensure advertised prices do not include the cash back offer. The full price before cash back must still be displayed.

“Often the cash back offer is made by a manufacturer not the retailer, but that doesn’t mean the retailer shouldn’t make a genuine effort to facilitate the cash back process.

“This means ensuring staff is trained to answer questions, having terms and conditions readily available in store, and being able to put customers directly in contact with the manufacturer in the event the customer has trouble redeeming the offer,” Ms Gago said.

Further information on the obligations for businesses under the Australian Consumer Law can be found at www.cbs.sa.gov.au or by calling 131 882.