Crackdown on Jewel IndustryReporter: Sophie Hull
Broadcast Date: February 21, 2008
How can a shop sell an item for $600 one day and only $200 the next?
Offers in store catalogues often are false, which has resulted in an retail industry crackdown.
The jewellery trade is a repeat offender when it comes to quoting false pre-discount prices.
The artificial inflation of prices is regarded as misleading and deceptive by the Australian Competition and Consumer Commission (ACCC).
And in its hunt for breaches of the law, the ACCC found Australian and New Zealand chain Prouds Jewellers to be the most recent offender of falsely inflated prices, a violation of the Trade Practices Act.
ACCC chairman Graeme Samuel said the company had adopted an advertising technique dubbed the ‘was, now’ method.
“The catalogue gave the clear impression that if you bought a product at $99 you were saving $100 on the item.
“The problem was they had rarely ever sold the product at $199 before hand,” he said.
The ACCC found the chain to have mislead consumers on 17 items listed in a 2006 catalogue.
The items were not on offer at the previous price immediately before the sale commenced.
“(It is) very common, it particularly raises its head during Christmas periods, during Mother’s Day, Father’s Day, Valentine’s Day,” Mr Samuel said.
“Always be wary of the discount that’s being offered. Just have a bit of a check to see whether the product was ever offered beforehand for a reasonable period of time at that price.”
Precious metals and gem stones do have fixed values and it is always worth having jewellery independently valued, while design and craftsmanship can also be open to interpretation.
Ian Hadassin, the CEO of the Jewellers Association of Australia (JAA), said he accepted pricing was a flexible concept in his industry.
“When you go to buy jewellery, you are in the hands of the jeweller and you are relying on his honesty and ethics to sell you the right product at the right price,” Mr Hadassin said.
“Because jewellery is something that you cannot readily compare from one store to another, it is not branded, it does not have a model number, it is difficult for consumers to make comparisons.”
A jeweller and a jewellery retailer are two very different things.
Jewellery retailers advertise huge discounts implying the cheaper, the better.
But when buying from a jeweller, customers pay for the quality of the gem, the design and often the brand name.
[ Diamond Guru : When buying from a real jeweller such as a manufacturer of quality hand made jewellery you pay very little extra for years of expertise and experience ]
In either case, there is no such thing as a recommended retail price.
“In our industry, retailers are creating their own recommended retail prices, and as long as those recommended prices are what they would reasonably expect to get in the market place, that’s fine,” Mr Hadassin said.
“In the end it’s impossible to police everybody - it’s just physically impossible. And there will always be a rogue element in any industry.”
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