The Australian Competition and Consumer Commission and state and territory offices of fair trading have been reviewing in-store and catalogue advertising of a number of bed retailers across Australia looking at claims consumers can buy beds for less than the normal price.
"The purchase of a bed is a significant expenditure for many consumers," ACCC Chairman, Mr Graeme Samuel, said today. "Retailers must ensure that their advertising is accurate and not misleading."
As the name suggests two-price advertising usually involves the use of two figures and is designed to emphasise the price discount on the product. It is often expressed as 'was $1999/now $1299' or '$1999 $1299'.
"Two-price advertising is designed to encourage consumers to buy a product by implying that the current price is less than they would have paid previously or what they will pay for it in the future. Where those savings are not genuine – for example, if the product was never offered for sale at the 'was' price – such claims are likely to be misleading and breach fair trading laws.
"Misleading two-price advertising can induce consumers into purchasing products as well as having an adverse impact on the sales of those retailers complying with the law," he said.
As part of the review of bed advertising, agencies will be requesting information from retailers to support price claims made in their advertising.
"Responses have already been sought from a number of retailers and that information will be carefully considered to see if any concerns arise.
"Whether or not concerns arise will depend on the basis of a retailer's claims. The review of two-price bed advertising by fair trading agencies is part of a proactive approach in looking at pricing practices.
"The review of bed advertising follows previous action against companies involved in two-price advertising in the jewellery industry in 2007.
"The ACCC has spoken with the Bulky Goods Association, which represents many of the bed retailers and offered to work with industry participants to ensure they understand their obligations under fair trading laws."
For media inquiries to the ACCC Chairman, Mr Graeme Samuel, please call Ms Lin Enright, ACCC Media, on (02) 6243 1108 or 0414 613 520. For general inquiries, please call the Infocentre: 1300 302 502.