ACCC launches legal action against The Good Guys over misleading promotions

Company News

by Glenn Dyer

The competition regulator, the ACCC, has launched Federal Court proceedings against The Good Guys Discount Warehouses (Australia) Pty Ltd for allegedly making false or misleading representations about their store credit and ‘StoreCash’ promotions, and failing to provide store credit to eligible consumers, in breach of the Australian Consumer Law.

The commission alleges that the false or misleading claims about the credit products continued for more than four years.

The Good Guys is a wholly-owned subsidiary of the consumer electronics group JB Hi-Fi, which confirmed the legal action in a separate statement to the ASX authorized by JB chair Stephen Goddard.

The ACCC said in a statement issued Thursday morning that The Good Guys ran 116 promotions between July 2019 and August 2023, in which it offered consumers store credit or StoreCash if they spent a certain amount of money on qualifying products in its online or physical stores.

The ACCC alleges that "The Good Guys represented that the only requirement to receive the store credit was to make a qualifying purchase," when that was not the case because consumers were also required to opt-in to receive marketing communications in order to receive store credit.

“We allege that the conditions for consumers to receive store credit as part of The Good Guys’ promotions were not communicated adequately in The Good Guys’ marketing materials,” ACCC Chair Gina Cass-Gottlieb said in the statement.

The ACCC also alleges that The Good Guys represented that store credit or StoreCash would not expire or would expire after a reasonable period, when in fact, for the majority of promotions, it expired within seven to ten days.

“We also understand that, for the majority of promotions, the store credit being offered expired within a very short period of ten days or less, which many consumers were unaware of.”

“We are concerned that as a result of the alleged conduct, consumers may have purchased products from The Good Guys which they might not have done otherwise.”

“Businesses should be on notice that promotional conditions must be prominently disclosed to consumers, rather than buried in hard-to-find locations, or they risk enforcement action under the Australian Consumer Law,” Ms. Cass-Gottlieb said.

The ACCC has also alleged that The Good Guys failed to provide store credits to thousands of eligible consumers within the time specified in the offers, or within a reasonable time, in breach of the Australian Consumer Law.

“Even where consumers met the conditions, we allege that The Good Guys did not provide a store credit at all to many eligible consumers,” Ms. Cass-Gottlieb said.

The ACCC said it is seeking consumer redress, penalties, declarations, compliance orders, publication orders, and costs.

In its statement, JB Hi-Fi said, "The Good Guys takes its compliance with the law very seriously and has a comprehensive compliance program in place. The Good Guys has always sought to provide value and benefits to its customers and has worked cooperatively with the ACCC throughout its investigation."

"As this matter is the subject of proceedings in the Federal Court, JB Hi-Fi is unable to make any further comment,” the statement concluded.

Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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