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Spotlight fined $7,500 for misleading sale promoti

Spotlight fined $7,500 for misleading sale promotion

Media Release 2000/8

The Auckland District Court today fined Spotlight Stores New Zealand Limited $7,500 for misleading customers about savings available during promotions in its Christchurch store in October, November and December 1998.

The Commerce Commission had prosecuted Spotlight for breaching the Fair Trading Act. Spotlight pleaded guilty to the offences.

Commerce Commission Chairman, John Belgrave, said that a Commission investigation showed that during the promotions in question, Spotlight had advertised one of its biggest selling items, DMC Stranded Cotton, used for embroidery, as being reduced in price by 35% - from $1.30 per skein down to 80 cents per skein. The average customer buys 10 to 15 skeins at a time. In fact, 80 cents was the regular selling price of this item. Spotlight Stores New Zealand Limited operates six stores throughout New Zealand.

"There is a message here for all businesses," Mr Belgrave said. "Where sales are advertised, the savings being offered to customers must be genuine. Where traders try to get customers into their stores by offering fake bargains, the courts will deal firmly with them."

Mr Belgrave said that misleading sales claims are not just unfair on consumers, they are also unfair on other retailers who are honest in their advertising.

Mr Belgrave also reminded consumers that it was important that they continue to shop around for the best bargains. "There is now a great deal of competition in most retail sectors of the economy and some excellent genuine bargains are available. However, rather than blindly accepting retailers’ sales claims, consumers need to shop around to ensure that they get the best deals, not merely the best sounding ones."

Media contact: Fair Trading Act Manager Rachel Leamy

Phone work (04) 498 0908, Cell phone (025) 208 0841

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