)
National electrical goods retailer The Good Guys has been fined $13.5 million for misleading conduct in relation to its store credit and StoreCash promotions which caught out more than 21,000 eligible customers over a period of four years.
The penalty was handed down to the JB Hi-Fi (ASX: JBH) subsidiary by the Federal Court following proceedings launched last year by the Australian Competition and Consumer Commission (ACCC).
The proceedings relate to 116 promotions run by The Good Guys between July 2019 and August 2023 in which it offered customers store credit, which was also called StoreCash in some promotions, if they spent a minimum amount, purchased a specific brand or product, or used a particular payment method.
The amount of credit varied between $10 and $1,000, depending on the promotion.
However, The Good Guys admitted that its advertisements for the store credit promotions did not disclose, or adequately disclose, the expiry period of the store credit which, for the majority of promotions, was as short as seven or 10 days.
In most cases, customers would only receive a store credit if they remained opted in to The Good Guys’ marketing communications.
“We took this court action because we were concerned that The Good Guys had failed to adequately disclose some really key conditions attached to these store credit promotions,” says ACCC chair Gina Cass-Gottlieb.
“The chance to earn store credit may have encouraged some consumers to make a purchase at The Good Guys they otherwise may not have made or to choose this retailer over others. We were concerned some of those consumers may not have done so had they been aware of all the conditions.
“When advertising promotional offers, all businesses must clearly disclose any key terms and conditions or limitations to avoid misleading consumers. Businesses that fail to do so could potentially face court proceedings and large penalties.”
The Good Guys also admitted that it failed to provide about 21,500 consumers with store credit within the time frame it had specified.
“Businesses that use promotional programs to attract consumers and differentiate themselves from their competitors must ensure they provide any gifts or rebates to eligible consumers in the time period they said they would,” says Cass-Gottlieb.
In addition to the $13.5 million in penalties, the Federal Court ordered The Good Guys to provide redress to certain consumers who participated in store credit promotions that did not disclose or adequately disclose the expiry period, by providing store credit with a longer expiry period. The ACCC says The Good Guys will contact consumers eligible for redress.
The Good Guys has already remediated consumers who did not receive their store credit due to not meeting the condition requiring them to remain opted in to marketing material and the 21,500 consumers who did not receive their credit within the specified time.
The ACCC notes that The Good Guys co-operated with its investigation, admitted liability and agreed to make joint submissions to the court about orders, including in relation to penalties.
)
