Online deal site 1-Day which trades under The Market has been fined $840,000 for misleading consumers on promotional claims on its online store.
The website, owned by The Warehouse Group, promoted sale offers including ‘for today only’ deals that lasted for several consecutive days while also reducing the number of stock units displayed — misleading consumers into making quick purchase decisions under time pressure.
A countdown timer used by 1-Day between 2016 and 2020 gave the “impression” that goods were available at an indicated price for a limited time while a stock level indicator showed that goods were running out.
“In a physical store, we wouldn’t expect a retailer to say there’s one item left when a number of items remain on the shelf or in the stockroom. The same goes for online – any representation about available stock needs to be truthful,” said Vanessa Horne, GM of fair trading at the Commerce Commission.
She said the “scarcity claims” used were often not based on the actual stock available or the timeframe for purchasing the respective products from 1-Day.
Judge Winter of the Auckland District Court declared in his sentencing that the company’s misleading conduct “was, therefore, a central plank of the defendant’s business strategy”.
“The defendant’s conduct gave it an unfair advantage in the marketplace over its competitors who did not employ pressure-selling techniques of this type and therefore prevented effective competition.”
The online store has now ceased the use of its countdown timer and stock indicator, and has also eliminated its Daily Deal sales.