Advertising your products and services is so important in a retail environment and, being a small retailer, it allows you to reach out to your local community and entice them to shop with you over bigger retailers.
But, just like big retailers, you have an obligation to meet the retailers code of conduct and not mislead your consumers. Doing so can result in a large fine for your business or you personally (depending on the structure of your business).
Recently, I’ve had dealings with a small business who has actually had misleading pricing which, from a consumer perspective has left a sour taste in my mouth. The company was advertising a product at a particular price, showing an image of the colour and style that I was exactly after. I was served the ad through Facebook, meaning that I could click directly on the ad and purchase through their online store. I was actually in need of the product and it was a saving of $20 to everywhere else – BARGAIN (or so I thought).
When I clicked through to the online store, the pricing was actually the $20 more, same as everyone else. I contacted the company and advised them what was happening and they told me it was actually a different colour in that range that was the lower price and that I had to pay the full price for the black. I supplied all of the information to the business making them aware of where the issue was and that they were actually displaying the colour I wanted at the lower price, this is multiple pricing. Under the requirements of Consumer Affairs Victoria, the company is obliged to either honour the lower price or to remove the product from sale / advertised until the issue is rectified.
Now, I’m a stickler for the rules, I’m paid to be and that is what makes me good at my job. But this is also what frustrates me when businesses are doing the wrong thing. What frustrated me more is that the business didn’t acknowledge the issue, offer to meet their obligations under the Consumer Act nor did they remove the ad from sale. Actually, every-time I went to Facebook it continued to be served to me as a paid advertisement, continually displaying the wrong price. The outcome of this for the business is they actually lost a guaranteed sale, plus future sales as I would be purchasing these items on a regular basis for the foreseeable future, plus the other items that I would have purchased from them as a local retailer.
So, what could the company have done better?
There are a few different ways that this company could have conducted themselves, in their follow up and advertising, which would have resolved the situation:
- Acknowledge when you’ve done something wrong: if a customer makes you aware of an issue, and you receive confirmation that what you are doing is misleading or wrong, meet your obligations. If the pricing is incorrect, honour the sale at the advertised price to that customer.
- Fix the advertisement: the wonders of advertising digitally is that you can very quickly rectify the situation and fix your pricing. When it’s printed, you can’t change as quickly however, if it’s paper, run an apology advert, place an apology up in your store or send a communication to customers advising them of the error and how it’s been rectified.
- Make sure that you meet your advertising obligations: there were a couple of things that this company should be doing and should consider doing for this type of product:
a. Where you have multiple pricing for a particular range, advertise the lowest price and display the price as either a “from” or a range “x to y”.
b. Display the picture for the lowest price product, as a preference. Alternatively, if you can only display the full range, show this with a disclaimer “price varies by colour”.
There’s many other ways that you can ensure you aren’t misleading customers. Disclaimers are used for a purpose. Consider simple messages like:
- Images for illustrative purposes only.
- Styles and sizes may vary by store.
- Only available whilst stock lasts.
- Limited stock available.
- No rainchecks.
- End dates.
- Pricing subject to change.
There’s lots of ways you can protect both yourself and the consumer when conducting marketing. It’s all about focusing on doing the right thing.
Mistakes happen in advertising. We have all made mistakes at one point in time, mostly without understanding the complete product type, style or pricing structure. I’ve learnt over time that you need to be prepared for surprises so considering all scenarios when preparing your advertising material will serve you well. The challenge that I have in this particular scenario is that the company appeared not to care about the mistake that they made. You have security with larger retailers in that they will always have a pricing policy that they must adhere too but, smaller retailers have this obligation too, but I’ve seen sometimes they choose to ignore it. The challenge for them is, being a local business, they need to keep local consumers. One bad experience can very easily become three lost customers. People are very quick to share negative experiences, not only with friends and family but through social media. I’m not the type of person to personally attack and business, especially a small local one, which is why this is anonymous. But that’s just me – there are many others who would take pleasure in publicly naming and shaming. We’ve seen a number of these appear in newspapers and on social media in the past 12 months which have resulted in a lot of negative press for the small business owner. Some have even ended up in legal disputes which is extremely costly (and generally unnecessary). It’s about simply doing the right thing.
Don’t be that business that ignores mistakes. Treat your customers in the way that you want to be treated (put yourself in your customers shoes and think how you would react). Acknowledge when mistakes are made. Don’t pretend it hasn’t happened and hope that it goes away. Always meet your obligations and be prepared to honour incorrect pricing and rectify your marketing quickly. We are all time poor but 10 minutes fixing a digital ad versus the time that it can take to respond to a formal complaint would be 10 minutes well spent.
There are many resources available to businesses to help them understand their obligations and to learn how to handle when errors have occurred. Use these tools to make sure that you don’t get yourself into trouble.For information to help you understanding your obligations, you can refer to some of the following government bodies (there are different ones for each state):
Consumer Affairs Victoria Products & Pricing
NSW Fair Trading Pricing & Advertising
Good Luck!
The Marketing Elf
© June 2018
The Marketing Elf 