A crack down on sales practices that mislead online shoppers

Otautahi - The Commerce Commission has issued a warning to online gift-box retailer, Occasion Box, for making false and unsubstantiated claims that were likely to mislead online shoppers on its website between May and December 2021.

This follows the sentencing of prominent online retailer, 1-Day, owned by The Warehouse Group, that was fined $840,000 for promotional claims on its online store, which were liable to mislead consumers about how long its daily deals would run for and the quantity of stock available. 

With rapid and continuing growth in online shopping by New Zealanders, the Commerce Commission’s key is looking to ensure pricing and promotional activities online are accurate and do not mislead consumers. 

Occasion Box used sales pops (pop-up boxes), purchased from a third-party e-commerce provider, which generated pop-up notifications of fake purchases by fictional consumers supposedly from various locations around Aotearoa New Zealand.

The notifications included links to products sold on the website and wording to say that it was a verified purchase.

The claims by Occasion Box reflected a type of misleading conduct that created a false sense of demand and popularity of the goods to website visitors, the commission says.

The representations were clearly false and could not be substantiated or verified against the retailer’s sales records, despite claiming to be verified purchases.

In the case of 1-Day, the promotion of daily deals and use of a countdown timer between 2016 and 2020 gave the impression that goods were available at an indicated price for a limited time, and a stock level indicator gave the impression that stock was running out.

In fact, often neither of these things were true and on many occasions the goods were available at the same price the next day.

Pricing and promotional activities are a priority area for the commission, because of the strong influence they can have on consumer purchasing decisions.