Strandbags has been hit with seven charges of breaching New Zealand’s Fair Trading Act over its discounting and sales practices.

The Commerce Commission alleges that between July 2018 and January 2020, Strandbags used misleading sales practices to sell a number of its products, such as claiming its products were being sold for a discounted price when they were not.

The Commission said Strandbags “routinely” used measures such as was/now pricing, i.e. “was $289, now $144.50”, percentage discount claims, i.e. “40 per cent off”, or claims about dollar savings, i.e. “Save $50”, when the products in question were not discounted at all, or had been discounted for so long than the ‘now’ prices could reasonably be interpreted to be a standard price.

“The Commission alleges that this conduct created the impression that prices being offered were significantly discounted or special prices when products were in fact being sold at their usual price or nearer to their usual price than consumers would believe to be the case,” the Commission wrote.

“The Commission also alleges that the prices of certain products were artificially inflated prior to promotion in order to make a more significant discounted pricing claim.”

As this matter is now before the Court, the Commission will not comment further at this time. This practice, while very misleading to customers, has been used by several retailers in the past few years.

Kogan, for example, used similar tactics during its 2018 TAXTIME promotion which cost it $350,000. The online retailer offered to drop prices by 10 per cent if consumers used a special promotional code, but it had already increased prices by a proportional amount of over 600 items.

Justice Davis, who handed down the fine, said Kogan’s conduct was serious and harmed purchasers and consumer confidence.