Online tool and workwear store Safety Warehouse has been cautioned for misleading customers on the nature of its promotion of ‘The Drop’ event last year.
The business’ promotion, held in Aotea Square in Auckland last December, was deemed “liable to mislead consumers” through the way it positioned itself as a $100K cash giveaway, when in reality it gave away around $3,600 in cash and the rest in store vouchers.
Customers who attended “New Zealand’s very first mass cash drop” were left frustrated due to its marketing, according to the Commerce Commission. Some were left injured.
“Businesses have a responsibility to be upfront and clear about what they’re offering – they must not tell half-truths or provide information that is liable to mislead consumers,” said Commission chair Anna Rawlings.
“They should think carefully about how consumers will interpret the claims they make and what consumers will likely understand about them – even when it is done as part of a one-off publicity event which is free to attend.”
The Safety Warehouse said, during the investigation process, that the marketing clearly referenced the fact it would be giving away $100,000 “in value” at the event, and that it didn’t think there was reason for “anyone to believe $100,000 in cash would be given away”.
The business also admitted that it was “hugely unfortunate” that the promotional headlines didn’t reference the “in value” statement, but said this would not have been a problem had people read into the details of the event.
The Commission deemed Safety Warehouse’s event was misleading, and could have led financially vulnerable people to spend money traveling to the event, only to receive vouchers instead of the cash they expected.
“We recommend [The Safety Warehouse] seeks legal advice on complying with the law and encourage [it] to regularly review its compliance procedures and policies,” the Commission said.