Online retailer Kogan was fined $ 350,000 for a misleading promotion that was run to encourage customers to purchase products before the fiscal year ends.
In July, Federal Court found Kogan violated Australian Consumer Law when it announced over four days that customers could use the “TAXTIME” code to cut product prices by 10 percent upon checkout.
The court found that just before the code was released, Kogan raised prices for 621 products – making the discount redundant.
The promotion began in June 2018, and was announced via emails sent to over 10 million customers and text messages sent to over 930,000 potential customers.
Today, Rod Sims, chair of the Australian consumer watchdog, ACCC, said that many consumers who used the code ended up paying more.
“In many cases, consumers who used the promotional code to purchase these products paid the same amount as before or after the promotion or more,” Sims said.
Victims of the Australian retail crisis
“Consumers were not receiving a real 10 percent discount as promised, and this has affected high value products such as Apple MacBooks, cameras, and Samsung Galaxy mobiles.”
The judge who supervised the case said the false promotions undermined customers’ confidence in the system as a whole.
“ Kogan’s offending behavior must be seen as dangerous, because misstatements about discounts offered on products not only harm buyers who obtain these products on the basis that they are receiving a real discount, but may also affect consumer confidence in discount offers when they are legalized. – That is, Judge Jennifer Davis said: “When products are offered for sale at a real discount on the price.”
In a statement to ASX, Kogan said he was reviewing the federal court ruling.
“The company is currently reviewing the federal court ruling and may submit another update once its review is complete,” Coogan said to shareholders.
“At all times, the company has focused on making the most in-demand products and services affordable and accessible.”
In his statement, Kogan noted that the Federal Court had said the misleading promotion was not a deliberate intent to violate behavior.
