Bike Barn fined $800k over 'calculated' misleading ad campaign
Bike Barn has been fined $800,000 in the Auckland District Court on Friday over its misleading pricing.
Bike Retail Group Limited and Bikes International Limited, the joint operators of Bike Barn in New Zealand, pleaded guilty to 18 charges.
Bike Barn attracted customers by claiming bikes have been discounted when they were actually being sold at their full value.
In sentencing Bike Barn, Judge Sharp noted the conduct was "pervasive" and "calculated".
Commerce Commissioner Anna Rawling says Bike Barn created misleading impressions about the discounts available on bicycles and the duration of the discounts.
"Bike Barn used exaggerated discounting strategies that gave the impression to customers that they were purchasing bikes at significant mark-downs from the normal retail price - typically 50 percent off," she says.
"It also advertised clearance specials that created an impression that the discounts were available for a limited time only.
"Neither was true. In fact, the discounted prices were Bike Barn's usual selling prices. Out of nearly 6000 bike sales we analysed during our investigation, only 30 were sold at the so-called full price."
The $800,000 fine Bike Barn received today is one of the largest handed down under the Fair Trading Act in New Zealand.
"Today's judgment sends a strong message to all retailers that employ discounting strategies," Ms Rawling says.
"It's vital that deals offer a real saving and products are not promoted in a way that entices consumers to make a purchase under false pretences."