Retailers on notice over misleading Black Friday promotions

Australia’s competition watchdog is considering taking action against several retailers over allegedly misleading and inaccurate advertising during the recent Black Friday sales period.

Conducting a sweep of ads during the popular promotion period – which runs throughout November – the Australian Competition and Consumer Commission said it spotted many misleading claims about the size and scope of the discounts purported to be on offer.

Black Friday and the associated Cyber Monday sales are an American tradition that exploded in popularity in Australia over the past decade.Credit: Eddie Jim

ACCC deputy chair Catriona Lowe said the regulator uncovered a range of “concerning practices”, including claims of “site-wide” discounts that were not site-wide, dubious claims over the value of discounts, and potentially misleading before-and-after pricing.

“We are further considering some of these examples for investigation and action, and the ACCC has already asked a number of retailers to justify their advertising claims,” Lowe says.

“We are warning retailers ahead of post-Christmas sales that they must comply with Australian consumer law in all the claims they make. We will continue our internet sweep of advertising practices throughout late December sales as businesses doing the right thing should not lose sales to businesses that are potentially misleading consumers.”

Black Friday and the associated Cyber Monday sales are an American tradition that exploded in popularity in Australia over the past decade. Originally focused around the last weekend in November to kick off the Christmas shopping period, discounts now tend to stretch month-long.

An example from the ACCC of misleading Black Friday promotions.Credit: ACCC, Aresna Villanueva

Lowe says the regulator was particularly concerned about the prevalence of misleading before/after – or was/now – discounts, noting it had received reports from consumers of retailers raising the price of products before the promotional period to create the perception of a bigger discount.

This is a similar issue to the case the ACCC is currently fighting against major supermarkets Coles and Woolworths, in which the regulator accused the supermarkets of artificially increasing prices on certain products before cutting them and advertising them as having their “prices dropped”.

The ACCC is collecting data on the price of goods before, during, and after the Black Friday sales and will review the data to see if similar artificial increases occurred.

The regulator says it has already seen “on-sale” products selling for the same non-sale price.

Other issues spotted included “site-wide” sales where there were a number of excluded items, fine print limiting the initial claims of advertised sales, and claims of products “up to X per cent off” where very few products are on sale at that percentage off.

Lowe says while several retailers were on notice, the ACCC also saw merchants with “appropriate and accurate advertising” during the Black Friday sales. “These include prominent exclusions and accurate claims about the scope of sales.”

The use of the phrase “Black Friday” in promotional material has been contentious previously, with Gorman owner Factory X taking retailing giant Harvey Norman to court after the home goods seller attempted to have Factory X’s “Black Friday” trademark struck off the register.

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