Following on from our report on a trade practices gaffe by Dick Smith Electronics, we won’t be surprised if its competitor JB HI-FI gets a letter from ACCC about its current stocktake sale.
We don’t know that JB’s discounts off ‘ticketed price’ are not legitimate, but there’s certainly a reasonable basis for questioning them. A campaign like that runs a real risk of misleading consumers.
Any savings misrepresentations would be a hot topic right now, since the Full Federal Court confirmed the criminal conviction of the former operator of the Zamel’s jewellery chain for false savings claims, and a $380,000 fine.
What’s the issue ?
There’s an old story about a well known Melbourne used car dealership where a salesman would be bought drinks all night if he managed to sell a used car for more than new car price.
Well, we’ve always imagined it must be similar at JB HI-FI. There’d be an extra shout on Friday night for any sales staff that managed to sell a plasma screen at the ticketed price. In our experience, you only have to ask ‘What’s the price ?’ to score an instant discount off the ticket. And that seems to be the experience of everyone we talk to.
If that’s the general case, then the ticketed price isn’t the true selling price. It’s a theoretical price only.
The punch in the current campaign is the suggestion that customers will save 10% by buying during the sale. But that 10% saving is – at least in part – imaginary if the ticketed price is not normally ‘enforced’ at other times of the year.
An example
If a unit has a ticketed price of $1,000 and I could have picked it up before the sale for $950 with an instant’s ‘bargaining’, then 10% off the ticketed price really represents only $50 off the true non-sale selling price. That’s a fraction more than half the ’10%’ figure that headlines the advertising.
Let’s test the point: What does a JB sales staffer say ?
Of course, JB’s advertisements may still be legitimate if the 10% is in addition to normal discount off the ticketed price, not instead of it. So we headed down to JB and asked the question.
We were told that the sale was actually good for buyers of some gear, where 10% discounts are not normally available. Maybe 5% is normally available on some items, so the 10% off sale is 5% better than you’d do on those items a week ago or a week from now.
On many other items, we were told, you’d get 10% off or better at any time, and it was no different during the sale. So what’s the point of the 10% off sale campaign ? ‘It’s to get people through the door.’
Our take on it: It’s the overall impression that counts
We think that the clear implication of the campaign is that shoppers will be 10% better off – but only if they buy by 1 June 2009 when the sale ends.
If that’s simply not true, then the advertisements are misleading and deceptive. Of course, many buyers would be aware that JB’s ‘ticketed price’ is rather theoretical. But many won’t, and they are the ones most at risk of being misled.
In December 2006, JB gave ACCC an enforceable undertaking not to make misleading claims about discounts off Recommended Retail Price. That’s because RRP is so often a theoretical price rather than a true one. It’s fair to ask whether ‘ticketed prices’ are not the new RRP.
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