- Sarah Mitchell
- 02 April 2013
It’s becoming increasingly difficult for retail organisations to ensure their promotional signs and shelf-edge tickets comply with the demands of regulatory bodies. Even the most tenacious retailer can run into trouble as evidenced by the recent case of Zamel’s jewellery store. When you consider the hefty fines being imposed on retailers who are making honest mistakes, the cost of non-compliance becomes a major operational issue.
Unintentional compliance problem
A recent article in SmartCompany magazine was almost painful to read. Zamel’s was fined $250,000 for misleading consumers through promotional signage used to discount certain items. To the untrained eye, the signs seemed perfectly reasonable. Zamel’s spokesperson Chris Rann was openly disappointed.
"Zamel's has at all times acted in a way that it believed was compliant with its legal obligations, and consistent with widespread industry practice," he explained.
ACCC cracks down
Who could blame him for being disappointed? It’s one thing to knowingly break the law but the vast majority of retailers are working hard to make sure their tickets are compliant. But it’s also become evident the ACCC aren’t interested in good intentions and best efforts. They expect absolute compliance when it comes to advertising discounts.
The same article included comments from ACCC chairman Rod Sims showing a clear direction to crack down on retailers.
"The ACCC has taken steps to ensure consumers are not misled as to savings they may make when retailers advertise goods. In this very competitive market, consumers are vulnerable to false and misleading tactics and the penalty imposed by the court today should serve as a stern warning to other retailers," explained Mr. Sims.
What does this mean for retailers?
The Zamel’s judgement is just one in a string of recent fines against retail businesses over misleading advertising. The ACCC is increasingly intolerant of even the slightest problem with promotional signage and tickets. When a retailer has a large network or is comprised of many different franchise owners, the ability to govern ticketing across the wider organisation becomes incredibly difficult to manage.
The impact is costly. A stiff fine will encroach on your profit margin but you can’t view it in isolation.
Additional costs for non-compliance:
- Legal fees
- Court costs
- Cost of publishing corrective notices
- Brand damage to your company especially if consumers believe your tickets have been intentionally misleading
When combined with the normal expenses of ticket production, the true cost of non-compliance adds up very quickly.
For more information
If you would like further information about ticketing compliance, give us a call at 1800 SIGNIQ. We have a great way to help retailers prevent these unnecessary expenses from occurring.