It seems the dodgy marketing tactic of raising prices and then dropping them back down and calling it a sale isn’t just a favourite of the supermarket duopoly.
It’s often done using a strikethrough displaying a percentage discount (such as “50% off”) or indicating that the sale price represents a specific dollar savings to the consumer (such as “Save as much as $3531”). Woolworths and Coles are notorious for this.
The countdown clock featured phrases such as ‘ending soon’, but the products continued to be advertised at the same price after the clock ran out.
The Germany-based bedding retailer Emma Sleep did both of these things, and it also employed another standard dodgy sales tactic – a countdown clock urging you to hurry up and commit to the deal before it’s off the table.
The problem, according to the Australian Competition and Consumer Commission (ACCC), was that the higher strikethrough prices never existed for 58 of the 74 products advertised, and for the other 16 products these higher prices only existed for a very short time. Most of the products were available for the so-called “sale” price all along.
The countdown clock was also leading shoppers down the garden path. It featured phrases such as “ending soon”, but the products continued to be advertised at the same price after the clock ran out.
The Federal Court recently found that senior management at Emma Sleep was aware of this marketing strategy and ordered the company to pay $15 million in penalties for making false or misleading representations.
The Court also ordered Emma Sleep to publish corrective notices letting customers know about the misleading pricing practices and to implement a compliance program within the company.
“When marketing their products, companies and their executives must ensure they do so honestly, responsibly and in compliance with the law,” says ACCC Commissioner Luke Woodward, adding that Emma Sleep’s tactics may have pressured customers “into making a rushed purchase decision”.
When marketing their products, companies and their executives must ensure they do so honestly, responsibly and in compliance with the law
ACCC Commissioner Luke Woodward
The run-of-the-mill marketing tricks took place between June 2020 and March 2023, during which time Emma Sleep’s website was visited more than 4.9 million times and its social media posts had more than 10 million views.
Over the nearly three years that the company was engaging in the deceptive tactics, it sold 243,000 products and brought in $134 million in revenue. So perhaps the $15 million is a small price to pay.
Get the inside story on our investigations into consumer rip-offs and bad business practices.
Andy Kollmorgen is the Investigations Editor at CHOICE. He reports on a wide range of issues in the consumer marketplace, with a focus on financial harm to vulnerable people at the hands of corporations and businesses. Prior to CHOICE, Andy worked at the Australian Securities and Investments Commission (ASIC) and at the Australian Financial Review along with a number of other news organisations. Andy is a former member of the NSW Fair Trading Advisory Council. He has a Bachelor of Arts in English from New York University. LinkedIn
Andy Kollmorgen is the Investigations Editor at CHOICE. He reports on a wide range of issues in the consumer marketplace, with a focus on financial harm to vulnerable people at the hands of corporations and businesses. Prior to CHOICE, Andy worked at the Australian Securities and Investments Commission (ASIC) and at the Australian Financial Review along with a number of other news organisations. Andy is a former member of the NSW Fair Trading Advisory Council. He has a Bachelor of Arts in English from New York University. LinkedIn
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