Former ACCC chair Rod Sims has called for an investigation into how Kogan advertises discounts on its exclusive brands, after an ABC report questioned whether the savings shown to shoppers are real. It lands the same week the ACCC took discount retailer dusk to court, and it is a warning to any marketer using was-and-now pricing.
A discount is only a discount if the higher price was ever really charged. Everything else is a story.
Former ACCC chair Rod Sims wants regulators to look at how Kogan advertises its discounts. The question is whether the was price a shopper sees is real.
After an ABC report, Sims called for an investigation into Kogan's pricing on its exclusive brands, questioning whether advertised discounts could mislead shoppers about how much they are actually saving. It is the oldest trick in retail. Inflate the reference price, then show a big red number next to it. The saving looks huge. The saving may not be real.
This lands in the same week the ACCC took discount retailer dusk to court, and it is not the first time Kogan has drawn regulator attention on pricing. For Australian marketers it is a reminder that was-and-now pricing is watched closely here.
Why it matters
Australian Consumer Law does not care how clever your promo looks. It cares whether it misleads. Reference pricing that overstates the saving is a well-worn enforcement target, and penalties for misleading conduct now reach up to $50 million per breach for a company. The reputational hit of an ACCC matter outlasts any short-term lift from the fake markdown. Trust is the asset. Torch it for a quarter of sales and you pay for years.
Maximum penalty per breach of Australian Consumer Law for misleading conduct by a company
What to do about it
Discounting works. Fake discounting works until someone checks. In Australia, someone checks.