Online retailer Kogan has been hauled to court to face allegations that it raised prices just before holding a supposed 10 per cent discount sale.
The ASX-listed retailer ran an "end of financial year" sale between June 27 and 30 last year, where customers could get 10 per cent off most products using the voucher code "TAXTIME".
However, the Australian Competition and Consumer Commission will allege in the Federal Court that the discounts were meaningless because prices were hiked up before the sale.
"The ACCC alleges that Kogan’s advertisements were false or misleading because Kogan increased the prices of more than 600 of its products immediately before the promotion," the ACCC stated.
"In most cases prices increased by at least 10 per cent."
ACCC commissioner Sarah Court said that businesses can't claim a sale or a discount unless it was actually offering real savings.
"We allege that Kogan’s advertisements were likely to have caused consumers to think they were getting products below their usual prices. In fact, Kogan had inflated product prices which we say created a false impression of the effective discount."
Kogan, in a message to the ASX, said it would defend itself in court and that the ACCC's case ignores "critical facts and matters".
"At checkout, all customers were made aware of the full price they would pay for the product and the price reduction that would be achieved by using the discount code. There was no confusion caused."
To rub salt into the wound of those who bought during the "10 per cent off" sale, the ACCC accuses Kogan of then putting the prices back to original levels after the sale period ended.
"Towards the end of the promotion period, Kogan’s email advertisements used statements such as '48 hours left!' and 'Ends midnight tonight!', which the ACCC alleges gave the impression that consumers only had a limited time to purchase at the 'discounted' prices."
The ACCC will ask the Federal Court to apply penalties, injunctions, declarations, corrective notices and costs against Kogan.
Kogan has previously been in strife with the consumer watchdog in 2009 and 2016 for similar claims of misleading customers.
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