Red Shed denies mark-up

The Warehoue has promised to investigate allegations of "up-pricing" - charging more for items than the figure on the label.

Regular customer Di Hill said she was overcharged twice on separate visits to the Mangere branch this month.

Hill said she was asked to pay $39.95 for 50 blank DVDs priced at $29.95 and $12.99 for vacuum cleaner bags advertised at $9.99.

She successfully argued against paying the higher price for the DVDs but paid the higher charge for the vacuum bags without realising.

When she found out, she went back for an explanation but was told by an assistant she could not get a refund. "I asked her if it was an error and she said The Warehouse often up-prices items the same way they down-price," said Hill.

"She told me the item was correct in the computer but no one had changed the price sticker. I said, 'You can't charge one price and display another' and she said, 'Yes we can'."

The Fair Trading Act says a trader is not obliged to sell a mislabelled item at the advertised price if they can claim it is a "reasonable mistake".

But David Naulls, of Consumer New Zealand, said any business with a pattern of charging the incorrect price would be in breach of the law.

The Warehouse is among 4500 businesses signed up to GS1 NZ, a non-profit organisation that develops industry standards, including rules around barcoding.

GS1 chief executive Peter Stevens said members accepted a code of practice stating the consumer was entitled to the lower price if there was a discrepancy.

He had received no complaints about The Warehouse, which had always operated fairly.

Marketing director for The Warehouse, Stuart Yorston, said the company did not have an "up-pricing" policy, and has forwarded Hill's concerns to his operations team.

He said The Warehouse always offered the lowest price if there was a discrepancy.

"With the vacuum cleaner bags she should have been given her $3 back, and if she comes in with her receipt we will make sure she gets it."

He said The Warehouse sometimes does "mark-ups" if the price needs to be changed due to competition, a new price from suppliers or an error in pricing from suppliers.

"In those cases, we take the old price off and put the new one on. The customer should always get the item at the lower price."

A Commerce Commission spokeswoman said consumers concerned about being overcharged should take the matter up with store management.

If they suspect a breach of the Fair Trading Act, they can lodge a complaint with the commission.