The Commerce Commission is reminding retailers of their responsibilities under the Fair Trading Act as the Christmas shopping season gathers pace.

With increasing numbers of shoppers heading online to buy gifts, the Commission is warning online retailers that they and their staff should be aware of the Fair Trading Act.  

“The Fair Trading Act prohibits false and misleading information being provided to consumers. That means all businesses – real or virtual – need to ensure that the information they give customers is accurate about all aspects of their product or service,” said Commission Competition Manager, Greg Allan. 

“New Zealanders are great watchdogs for misleading or deceptive claims made by businesses. The Commission receives over 10,000 complaints a year and around 70% are about possible breaches of the Fair Trading Act, so all retailers should make sure they understand their obligations and deliver on them.

“In short, don’t promise what you can’t deliver because it’s likely the Commerce Commission will hear about it.”

Make sure your delivery dates are accurate

Online retailers failing to deliver goods by the promised date is a common fair trading complaint over the holiday period, said Mr Allan.

“We have already received our first complaints this Christmas about online gifts not turning up by the promised date,” he said.

“We also commonly hear from people buying Christmas presents online and then being told the goods are not available just before Christmas.”

“Retailers, particularly those trading online, must be very careful about promising to deliver goods by a certain date at one of the busiest delivery times of the year,” Mr Allan said. 

Comparing apples with apples in pricing

When comparing a ‘special’ price with a previous price, such as ‘was $50, now only $35’, retailers must be careful about the previous price. As a general rule, a product should have been available for sale at that price for a reasonable time before the price reduction. Raising prices and quickly lowering them in order to claim larger ‘savings’ is misleading and would breach the Fair Trading Act.

Is it really made in New Zealand?

Boosting sales by misleadingly claiming New Zealand-made status is a breach of the Act. Retailers need to be aware that there are a number of considerations to think through when labelling a product as ‘New Zealand made’. 

Help is available

To help businesses comply with the Fair Trading Act the Commission publishes online fact sheets and guidance. Topics include online selling, correct pricing techniques, place of origin claims and more. Retailers can also check their Fair Trading Act obligations with the Commission by phoning 0800 94 3600.

Background

The Fair Trading Act (FTA) is designed to protect consumers and make competition more effective. The Act prohibits false and misleading behaviour by businesses in the promotion and sale of goods and services.  The Commerce Commission enforces the laws under the Fair Trading Act.