Warehouse site offers ‘one-day’ deals that aren’t one-day, despite $840,000 fine


Company

Auckland District Court has fined online retailer 1-day.co.nz a near-record fine for misleadingly advertising ‘today only’ discounts, but owner The Warehouse Group is sorry, Not sorry

Comment: The 1-day website was judged yesterday morning to have pressured potential buyers into making quick decisions. Last night the company was doing much the same thing.

1-day was first established as a daily discount merchant. According to the story he tells online, founder Luke Howard-Willis was returning from an unsuccessful business trip to China. “Legend has it that on his flight home with Air NZ, Luke scribbled down his idea on a napkin. While brainstorming, it came to his mind. Why not avoid making a big website buying and instead selling thousands of items in a single day?”

The site launched in 2007 and, according to 1-day’s own account, its revenue quickly grew to $2 million a week. It promoted its daily deals “for today only”, but according to the Commerce Commission, it began to repeat the deals on consecutive days. This continued until 2020, when the commission cracked down.

The online store was also programmed to gradually reduce the amount of stock shown as available throughout the day, which meant that consumers often did not see accurate information about available stock or how long a product was available. the offer.

1-day was part of the Torpedo7 retail chain, which was acquired by The Warehouse Group in 2013. The online store is now part of TheMarket, but it still has its own 1-day Facebook and Instagram pagers. co.nz, offering its so-called one-day deals.

The company was fined Wednesday for deceptive promotions. Auckland District Court Judge Peter Winter said his selling technique was to pressure potential buyers into making a quick or quick decision, faced with a 24-hour deadline and an offer decreasing of advertised products.

“The deceptive conduct was therefore central to the defendant’s business strategy,” he said. the limited availability of stock and the company’s advice and experience, I find the defendant’s offense to be more than reckless. The accused’s offense was deliberate.

He said 1-day’s conduct gave him an unfair market advantage over competitors who did not employ high-pressure sales techniques.

Earlier this week, one-day deals were announced on his Facebook page, such as Adidas sunglasses for $99.99 and 3SixFive punching bags for $179.99 — both (if one followed the link) were still available last night on themarket.com at the same time. “1 day” price announced.

But Warehouse Group general affairs manager Jordan Schuler said a day was no longer about daily deals available for 24 hours. “These are value prizes available at all times.”

1day.co.nz was now in the “great deals” section on TheMarket.com, she said. The misleading promotions took place before 1-day became part of TheMarket.com and before The Warehouse bought the company.

In a statement, she said: “We take our obligations under the Fair Trade Act seriously and accept charges for legacy features of the Day-A-Day website. The implementation of these features predated our property, and these features have been corrected after they were raised by the Commerce Commission.”

And certainly, the court judgment was against the misleading use of the phrase “today only” rather than “1 day”. The question is whether the continued use of “1 day” offers is materially different from the original “today only” offers.

Vanessa Horne, chief executive of fair trade at the Commerce Commission, said promoting daily deals and using a countdown timer between 2016 and 2020 made the goods appear to be available for a limited time and that the stock level indicator gave the impression that the stock was running out.

“In fact, often none of these things were true, and many times the goods were available for the same price the next day,” she said last night.

“In a physical store, you wouldn’t expect a retailer to say there is one item left when a number of items remain on the shelf or in the warehouse. The same goes for the web – any representation about available stock must be truthful.

The Commission has published new guidance on its website regarding misleading online sales practices, which can be read here.