The Jewellery Group (Zamel’s) has lost its Federal Court appeal against Justice Lander’s judgement that the retailer had made false or misleading representations to consumers.
In August 2012, Justice Lander found:
• Zamel’s made false or misleading representations in relation to 44 items of jewellery that appeared in its May 2010 catalogue and up to four other catalogues from November 2008, by its use of two-price advertising such as ‘Was $275 Now $149’.
• The catalogues were directed to consumers who were unaware of their ability to obtain discounts outside Zamel’s sales periods.
• The two-price statements conveyed to those consumers that they would save the difference between the two prices if the jewellery item was purchased during the sale period when that was not the case.
• Those consumers would not have made the saving represented because Zamel’s had not sold the item at or near the ‘was’ or ‘strikethrough’ price, or had sold it in limited numbers at or near that price, in the 4 months prior to the sale period.
• Zamel’s had a vigorous discounting policy outside sale periods which meant the ‘was’ or ‘strikethrough’ price was rarely paid by a Zamel’s customer.
In January this year Justice Lander declared Zamel’s had engaged in conduct in contravention of the TPA and imposed a penalty of $250,000 on Zamel’s in relation to the May 2010 catalogue.
Justice Lander also ordered Zamel’s to publish corrective notices and implement a trade practices compliance program.
“The ACCC welcomes this decision as it provides further guidance on the application of the law in the context of two-price advertising,” ACCC chairman Rod Sims said.
“The Full Federal Court has confirmed that Zamel’s, a significant player in jewellery retailing, took advantage of consumers and misled them about the level of savings they would achieve by purchasing items during catalogue sales.”
“This outcome serves as a warning to all retailers that the inappropriate use of two-price advertising can mislead consumers and contravene consumer protection laws.”