Kogan in Court for Price Jacking

Kogan in Court for alleged false or misleading discount advertisements
23 May 2019
The ACCC has instituted proceedings against Kogan Australia Pty Ltd (Kogan) in the Federal Court alleging that Kogan made false or misleading representations about a 10% discount promotion, in breach of the Australian Consumer Law.

Between 27 and 30 June 2018, Kogan ran an online promotion where consumers could obtain a 10% discount on most of its products by using the discount code “TAXTIME”. The promotion was held ahead of the end of the 2017/18 financial year.

Kogan published this promotion on its website and via text messages and emails to consumers.

The ACCC alleges that Kogan’s advertisements were false or misleading because Kogan increased the prices of more than 600 of its products immediately before the promotion. In most cases prices increased by at least 10%.

“We allege that Kogan’s advertisements were likely to have caused consumers to think they were getting products below their usual prices. In fact, Kogan had inflated product prices which we say created a false impression of the effective discount,” ACCC Commissioner Sarah Court said.

Towards the end of the promotion period, Kogan’s email advertisements used statements such as “48 hours left!” and “Ends midnight tonight!” which the ACCC alleges gave the impression that consumers only had a limited time to purchase at the “discounted” prices.

However, Kogan reduced the prices of the affected products shortly after the promotion ended, many back to their pre-promotion prices.

“Businesses must not make claims to consumers about discounts or sales unless they are offering genuine savings,” Ms Court said.

The ACCC is seeking penalties, injunctions, declarations, corrective notices and costs from Kogan.

https://www.accc.gov.au/media-release/kogan-in-court-for-all...

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Comments

  • +36 votes

    Verdict for this might set an interesting precedent.

    • -1 vote

      What precedent?

    • +2 votes

      One had already been set from the last time they were fined a few years back for doing the same thing.

      •  

        Did you have a reference for this?

        • +4 votes

          had the same thought and went looking before you even raised the question! hah

          https://www.accc.gov.au/media-release/kogan-pays-32400-penal...

          • +5 votes

            @Name:

            As part of the Fathers’ Day promotion in 2015, Kogan advertised on its eBay store that consumers would receive a 20% discount on the following computer monitors if they were purchased between 24th and 29th August 2015:

            Kogan 27” Cinema Display WQHD;
            Kogan 28” 4k LED Monitor; and
            Asus 27” LED Monitor PB278Q.
            Before or at the start of the promotion, Kogan increased the prices of the three computer monitors featured on its eBay store. As a result, although consumers received a 20% discount off the newly increased prices, they in fact only received a 9% discount off the previously advertised prices for each of the three computer monitors.

            Thanks! Quote above is from your link.

            Looks like it's even worse this time, because with the price jack consumers were in some instances getting no discount off the regular price. (Whereas in the 2015 instance, they were at least getting 9% off.)

  • +20 votes

    I wonder if they'll be able to hold ebay liable for their sellers price jacking after this

    • +12 votes

      Not directly but it may assist in new policies to ensure that eBay as a marketplace may have to penalize stores that price jack.

      Overall, this is a good thing.

    • +1 vote

      Would eBay be liable or the eBay stores like Harvey Norman, Good Guys?

    • +1 vote

      I believe the loophole they use is that it’s eBay, the marketplace, offering the xx% discount; not the seller. As such, the seller is not liable for any discounts which eBay might offer.

      • +2 votes

        Whatever the case, I think we should collect evidence and submit complaints to the ACCC to see what they have to say about the practice.

  • +2 votes

    another day another kogan story.

  • +1 vote

    Waiting for Gerry Harvey's two cents worth. It would be nice if the % off advertised was RMS.

  • +1 vote

    Very good. Lets see what happens.

  • +10 votes

    Good on the ACCC!

    Here's an ABC report on it, too:
    Kogan sued for lifting prices before offering 'false' discounts
    https://www.abc.net.au/news/2019-05-23/kogan-sued-by-accc-fo...

  •  

    De-ja-vu to the old Dick Smith 'sales' - 1 week the prices were discounted, the next week they went up but with a coupon

    • +2 votes

      I miss Dick Smith though…. my house is still full of electronics purchased from them below cost, from the period where they tried to trick people into believing they were making lots of money by dumping stock below cost.

  • +1 vote

    about time

  • +2 votes

    What about for eBay sellers jacking up prices before the discount run? Lets hope they get a slice of the verdict as well.

    • +7 votes

      They need to also go after EBay as they're complicit & enabling the behavior with their sales.

  • +5 votes

    same thing with "free shipping" promos. lower price + paid shipping or higher price + free shipping

  • +3 votes

    If anyone wants some bedtime reading. Here's a link to the notice of filing.

    • +1 vote

      Annexure 3 shows the original products and price changes

      621 products, I wonder where they got the info from.

      • +2 votes

        idk… maybe some guy with too much time who likes to lurk on bargain sites.

        (did I just described the entire population of this site?)

        • +1 vote

          that's less than the good guys most ebay sales without factoring in delivery changes….

      •  

        I wonder where they got the info from.

        Price hipster?

  • +1 vote

    Thankful that at least one retailer is being sued for this

  • +5 votes

    I am so glad. This has had happened to me with Kogan and they wouldn't refund me the price difference. It was terrible, I had brought something during a promotion (with supposed sale), and then after a few weeks, the item dropped in price (but was not on sale and was normal). There is no trust in this company!

    It really makes me tremendously angry, to be honest. They should trade with ethics and integrity. And I hope that the ACCC fine them hard and another electronic company who is for the customer can take to the Aus markets.

  • +7 votes

    wat about all those ebay sellers just before the 20% discount?

    •  

      Their statement to the ASX is a load of BS.

      •  

        "Kogan.com did not gain any material financial benefit as a result of the promotion."

        They are not denying they made money from promotion - just not a significant (material) amount. What amount is sufficient to be material is up for negotiation though.

        So they aren't lying in terms of that statement, just making it vague enough to be able to argue it later on.

  •  

    I'm mildy shocked

  • +2 votes

    They still haven't learned their lession have they?

  • +2 votes

    kogan sure have some stupid working for them …

  • +5 votes

    WOW! The last one was 3 products in which customers only received a 9% discount as opposed to 20% as advertised, in that case Kogan had to pay a $32,400 fine.

    This is over 600 products, with the jacking making the products even more expensive, even after the discount. I can't wait to see the fine this time! This is gonna be good.

  •  

    Another article on the SMH on this.

  • +3 votes

    NAIL EBAY FOR THE EXACTLY THE SAME TRICK & ILL BE MORE IMPRESSED

  • +1 vote

    My latest with Kogan was a cheap second lawn mower, a "Powerblade". This I would say was a Chinese import from Baumr-AG, rebadged by Edisons and then offloaded to Kogan.
    When I deboxed it to assemble, I noticed it was chipped and rusted on the handlebar struts.

    I then discovered, when I tried to use their "new" complaints format, that seems like a catch- all that just dumps the complaint without submitting it….. they were flipping me the bird, as much as saying to me and all their to customers, finally - "you must realise, we are supplier of cheap crap, that sometimes works, so pay your money and take your chances!"

    Incidentally the mower works OK and I have discontinued my assault on Kogan, which of course they expect and rely on with their "no contact with unhappy clients" customer service.

    So, unless you're the type who expects a grizzly bear to lick your hand when you pat it, you should expect Kogan, and many others, to attempt to rip you off, in every transaction. You must, of course, account for this and take the appropriate steps to protect yourself.

    Remember they do perform a valuable cut-price service and operations like OZbargain would not have any reason to exist if it wasn't for Companies like Kogan

  •  

    Oh dear.
    I never liked Kogan anyway.
    And they have price jacked their mobile plan prices as well.
    I have moved well away from them now.
    Better deals to be had elsewere

  • +2 votes

    Article on such price jacking and discounting tactics: https://www.abc.net.au/news/2019-05-30/kogans-fake-discounts...

  •  

    Can't wait until they nab Ola for price jacking too.

  • -2 votes

    jesus.. i didn't even realise price jacking is illegal… seems a bit ridiculous tbh…

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