ACCC slams furniture chain for misleading consumers on savings

A Victorian furniture chain has been slammed by the Australian Competition and Consumer Commission for misleading consumers in a number of advertisements.

This is the latest in a string of incidents involving a furniture chain and alleged savings the ACCC have found to be misleading. In 2009 Super-A-Mart, as well as Furniture and Bedding Concepts, were ordered by the watchdog to pay fines and give customers vouchers to make up for misleading ads.

And just last week, the Federal Court ordered an end to a dispute between furniture giants Super-A-Mart and Nick Scali over a particular type of sofa.

In the latest stoush, Furniture Galore has been ordered to pay three infringement notices of $19,800 for misleading consumers about savings, along with an enforceable undertaking.

Furniture Galore was contacted this morning by SmartCompany, but no reply was available prior to publication.

The ACCC has said that between July 2010 and September 2011, Furniture Galore said that some goods in its catalogues and radio ads were on sale at reduced prices so customers could make savings. But it later admitted that it had not sold or offered those goods at the higher usual price for a reasonable amount of time.

The ACCC points out that according to consumer law, any representation about savings consumers are likely to make must be based on prices that have been made available to consumers for a reasonable period of time.

"In the midst of the summer sales period this is a very timely reminder to all retailers that they must ensure that any advertised savings are genuine and not misleading or deceptive," chairman Rod Sims said in a statement.

"Two-price advertising is a powerful marketing tool designed to encourage consumers to make purchases during a sale period because the goods are cheaper than normal.”

Furniture Galore must now print corrective notices in its stores, on its website, and in the Herald Sun newspaper. It will also start a compliance program for trade practices law.

"Retailers who overstate or misrepresent the value of savings offered to consumers during special sales or promotions risk financial penalties or court action by the ACCC."