Luggage retailer Strandbags fined $780k by court for misleading customers after Commerce Commission inquiry

Strandbags was fined $780,000 in the Auckland District Court for misleading consumers today. Photo / 123rf

Handbag and luggage retailer Strandbags has been fined $780,000 by the Auckland District Court for misleading customers with false discounts and sales.

Strandbags routinely advertised its products as if they were significantly discounted or being sold at special prices, Commerce Commission chairwoman Anna Rawlings said in a statement this evening.

“Our investigation found that some products had never been sold at the higher price from which a discount was said to be made, while others were on sale for so long that the prices could no longer be said to be special.”

Strandbags used numerous pricing strategies between 2018 and 2020 to mislead customers about available discounts or “special” prices, Rawlings said.

“We found prices of certain products were artificially increased prior to the sale, in order to make the discount seem more significant. Other products had been repeatedly discounted, but only ever referring to the very original ticket price as a comparison, despite being sold at different, lower, prices since.”

Commerce Commission chairwoman Anna Rawlings said Strandbags used numerous pricing strategies between 2018 and 2020 to mislead customers about available discounts or “special” prices. Photo / Mark Mitchell

In the Auckland District Court, Judge Claire Ryan ruled that the company’s practice of increasing prices and then immediately discounting them was deliberate.

Extended and repeated discounting was “significantly” or “highly” careless, bordering on reckless, she said.

Judge Ryan agreed with the Commerce Commission that Strandbags’ profitability was partly due to breaching the Fair Trading Act.

The Commerce Commission said Strangbag’s misleading practices could have led people to believe they were getting a better deal than they really were.

Rawlings said businesses needed to review their pricing processes and current deals, especially with Black Friday and Christmas approaching.

“Consumers deserve to get the deal that they think they are getting. When making a promotional claim, think about the overall impression that consumers might take away from it and whether this differs from what you’re actually offering.”

The Auckland District Court has fined handbag and luggage retailer Strandbags $780,000 for misleading customers with false discounts and sales. Photo / Nick Reed

Rawlings said businesses should make sure the bargains they offered were “genuine and unambiguous”.

Discounts should not be promoted in a way that “entices consumers to make a purchase” if that discount wasn’t as good as it appeared.

“When making a promotional claim, think about the overall impression that consumers might take away from it and whether this differs from what you’re actually offering.”

People should shop around and research before rushing into a purchase, Rawlings said.

“Just because one store is offering a discount, does not mean you won’t get a better price elsewhere.

“Get an idea of the price you could usually expect to pay for something and then satisfy yourself that the saving you are offered is genuine.”