The consumer watchdog says Kogan ‘misled customers’ with a confusing discount

The consumer watchdog is taking court action after claiming online retailer Kogan misled customers with a confusing promotional campaign.

Kogan says it “strongly denies” claims made by the consumer watchdog the online retailer misled customers by offering a 10 per cent discount only after raising the price of hundreds of products.

The Australian Competition and Consumer Commission has issued Federal Court proceedings alleging Kogan made false or misleading representations and breached consumer law.

It alleges the company increased the prices of more than 600 products immediately before the promotion.

Most were raised by at least 10 per cent.

The watchdog says between June 27 and 30 last year, Kogan promoted the “taxtime” discount code via email and text messages, using statements such as “48 hours left!” and “Ends midnight tonight!”.

Kogan released a statement shortly after denying the allegations.

The ACCC said this gave the impression that consumers only had a limited time to purchase at the “discounted” prices.

“We allege that Kogan’s advertisements were likely to have caused consumers to think they were getting products below their usual prices,” ACCC commissioner Sarah Court said.

“In fact, Kogan had inflated product prices which we say created a false impression of the effective discount.

“Businesses must not make claims to consumers about discounts or sales unless they are offering genuine savings.

Kogan released a statement shortly after denying the allegations and saying it will defend the proceedings.

“The proceedings commenced by the ACCC ignore critical facts and matters which are in Kogan’s view highly relevant in assessing the overall impression of the promotion by consumers who are intimately familiar with online retailing and how a discount code functions,” the company said.

It says the marketing of the deals were carefully considered to avoid confusion for the shopper.

“Kogan at all times made clear that the price reduction applied at the time of checkout,” the online retailer said.

“At checkout all customers were made aware of the full price they would pay for the product and the price reduction that would be achieved by using the discount code.

“There was no confusion caused.”

The company said it had co-operated fully with the consumer watchdog throughout the investigation and “is disappointed that the ACCC has nevertheless decided to issue proceedings against Kogan.”

The ACCC is seeking penalties, injunctions, declarations, corrective notices and costs from Kogan.

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