According to the Jewellers Association of Australia (JAA), the matter stemmed from a complaint the association received in December 2015.
The complaint, which was lodged by an industry member, related to an unnamed regional jewellery retailer in New South Wales that was said to be part of a multi-store operation.
Based on the information provided, the JAA Code Committee suspected the retailer was possibly in breach of Australian Consumer Law as well as the section of the JAA Code of Conduct that relates to comparative price advertising, otherwise known as ‘two-price advertising’.
“The retailer had in-store signage offering an 80 per cent discount on marked prices,” JAA Code Committee chair Colin Pocklington explained. “Whilst retailers can offer any discounts they wish, such statements are considered a savings representation … so the retailer would need to be able to prove that sales had been made at the full price.”
ACCC steps in
The matter was referred to the ACCC in early February 2016 after the retailer failed to respond to the Code Committee’s requests for further information.
Although the retailer had not been a JAA member and, thus, not a Code ‘participant’, Pocklington said, “We prefer to assist all retailers, whether JAA members or not, to comply with the Code, as this benefits both consumers and the industry as a whole. Referring matters to the ACCC is a last resort.”
During the course of the investigation, which involved officers from the consumer watchdog visiting the store to inspect advertising material and price offers as well as to interview staff, the retailer reportedly volunteered to modify its practices.
An ACCC spokesperson declined to comment specifically on the investigation but said Australian Consumer Law required businesses to be clear and accurate when posting price comparisons to “ensure consumers are not misled about the savings that may be achieved”.
Pocklington previously told Jeweller that in terms of Code of Conduct complaints, two-price advertising had been amongst those of particular concern.
A high-profile case involving Zamel’s jewellery retail chain placed the spotlight on two-price advertising practices in the jewellery industry in 2012.
In August of that year, the Federal Court ruled that the business had misled consumers over the savings they would make on jewellery items promoted during sales periods.
Since then, the JAA has taken steps to educate retailers on this issue, including modifying the Code of Conduct, and holding industry meetings and educational seminars to increase clarity.
When asked about progress in this area, Pocklington said that although jewellers now had a greater understanding of the matter, more work was required.