Appliances retailer Noel Leeming is facing criminal charges filed by the Commerce Commission over misleading pricing practices.
The regulator said the problem stemmed from Noel Leeming’s ‘Price Promise’ campaign, in which the company claims to match competitors’ prices.
Unlike advertised, the price matches are difficult to obtain as they come with many limitations and conditions which are not made obvious to customers, it added.
“Price match advertising gives the impression that customers will be able to show up and get a match for competitor’s prices,” commented Commerce Commission deputy chair Anne Callinan.
“It’s crucial that businesses promoting any price match offer factor in the overall impression of the claims they make, and that all information is clear to customers.”
In addition, the commission has filed charges against Noel Leeming over promotions where the advertised product or price was different from what could be purchased.
The regulator also alleged the company gave incorrect or misleading information about consumers’ rights when they complained about faulty products.
ComCom considers all these practices as breaches of the Fair Trading Act, which can result in a maximum penalty of $600,000 per charge for businesses.
In response, Noel Leeming CEO Jason Bell said he was “baffled” by the Commerce Commission’s decision, adding that the company has committed no offence and will “vigorously defend” the case.
“We’re perplexed by the commission’s claim that price matches were difficult to obtain, when over 250,000 Kiwis saved money with our Price Promise between 2019 and 2021.
“Our terms and conditions are fair and presented just like other retailers, and when we can’t price match, we often don’t get the sale. Price matching is widely used by the industry, and it helps drive competition, and without it, Kiwis will end up paying more., Bell continued.
He added that such significant public resources should instead be spent addressing the potential harm to consumers from overseas online retailers operating outside the rules.
Noel Leeming is a wholly-owned subsidiary of The Warehouse Group. The appliances retail business recorded a 4.5 per cent sales uplift in the third quarter.
