The Federal Court has ordered The Good Guys Discount Warehouses (Australia) Pty Ltd to pay $13.5 million in penalties for misleading conduct in relation to several of its store credit and 'StoreCash' promotions, and for failing to provide store credit to more than 20,000 eligible consumers.
The proceedings related to 116 promotions run by The Good Guys between July 2019 and August 2023 in which it offered customers store credit (also called StoreCash in some promotions) if they spent a minimum amount, purchased a specific brand or product, or used a particular payment method. The amount of credit varied between $10 and $1,000, depending on the promotion.
The Good Guys admitted that its advertisements for the store credit promotions did not disclose, or adequately disclose, the expiry period of the store credit which, for the majority of promotions, was as short as 7 or 10 days, or, in most cases, that customers would only receive a store credit if they remained opted in to The Good Guys' marketing communications.
"We took this court action because we were concerned that The Good Guys had failed to adequately disclose some really key conditions attached to these store credit promotions," ACCC Chair Gina Cass-Gottlieb said.
"The chance to earn store credit may have encouraged some consumers to make a purchase at The Good Guys they otherwise may not have made or to choose this retailer over others. We were concerned some of those consumers may not have done so had they been aware of all the conditions."
"When advertising promotional offers, all businesses must clearly disclose any key terms and conditions or limitations to avoid misleading consumers. Businesses that fail to do so could potentially face court proceedings and large penalties," Ms Cass-Gottlieb said.
The Good Guys also admitted that it failed to provide about 21,500 consumers with store credit within the time frame it had specified.
"Businesses that use promotional programs to attract consumers and differentiate themselves from their competitors must ensure they provide any gifts or rebates to eligible consumers in the time period they said they would," Ms Cass-Gottlieb said.
As well as the $13.5 million in penalties, the Court ordered The Good Guys to provide redress to certain consumers who participated in store credit promotions that did not disclose, or adequately disclose, the expiry period, by providing store credit with a longer expiry period. The Good Guys will contact consumers eligible for redress.
The Good Guys has already remediated consumers who did not receive their store credit due to not meeting the condition requiring them to remain opted in to marketing material, and the approximately 21,500 consumers who did not receive their credit within the specified time.
The Good Guys co-operated with the ACCC, admitted liability, and agreed to make joint submissions to the Court about orders, including in relation to penalties.
Consumer and fair trading concerns in the supermarket and retail sectors, with a focus on misleading pricing practices, are a current ACCC priority.
Note
The Court accepted the parties' joint submissions that part of the conduct contravened certain consumer protection provisions of the ASIC Act as the supply of store credit and StoreCash is a financial service. ASIC delegated its powers under the ASIC Act to certain senior officers of the ACCC to take this enforcement action.
The Court also found that The Good Guys contravened the Australian Consumer Law by failing to provide store credits to approximately 21,500 consumers within the time specified.
Example of store credit promotion:
Example of StoreCash promotion:
Background
The Good Guys is an Australian household appliance chain which conducts its business from physical stores across Australia as well as online. The Good Guys' parent company is JB Hi-Fi Limited (ASX: JBH).
On 11 July 2024, the ACCC instituted proceedings against The Good Guys in the Federal Court.
