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Appliance retailer Hill & Stewart has been fined $75,000 on charges including advertising products such as fridges as "interest free" on credit terms, when they were dearer than the cash price.
Under the Fair Trading Act, the interest-free and cash prices must be the same, Commerce Commission chairwoman Paula Rebstock said yesterday after the company was sentenced in the Auckland District Court.
Last night, the company offered refunds to customers who could prove they had been misled by the practices found in breach of the act.
Last year, commission agents bought a fridge-freezer from the Takanini store for $890 cash, but the advertised interest-free price was more than $100 higher, at $999.95. The cash price was not available on the interest-free terms, the commission said yesterday after the court case.
Hill & Stewart pleaded guilty to 14 charges under the Fair Trading Act: 11 related to advertising interest-free prices that were higher than the cash prices; two involved false representations about the cost of a washing machine; and one related to a false representation about washing powder.
The commission said that in one of the breaches, the company's in-store price for a washing machine was $20 more than the $1179.95 advertised in a mailer. "False or misleading advertising entices customers to the advertiser's business," said Ms Rebstock.
The washing powder breach involved a 6kg "free gift" of Persil with the purchase of a washing machine or tumble dryer. But commission investigators were told that if the "free" Persil was not wanted, $20 would be knocked off the price.
"Free must mean free," said Ms Rebstock, "and the price of products must not be increased to cover the cost of something described as a free offer."
Managing director Nigel Merrett said Hill & Stewart would not appeal.
