Discount chain Look Sharp has been slapped with a nearly $300,000 fine for “frequent and widespread pricing errors” – with some products costing as much as 33% more than advertised.
Walond Limited, commonly known as Look Sharp – known for its extensive range of party supplies and hardware products – has 20 stores nationwide and a revenue of up to $44 million a year.
However, the company has been fined $292,500 in the Auckland District Court after pleading guilty to making misleading representations about product prices and consumers’ rights under the Consumer Guarantees Act, in breach of the Fair Trading Act.
The Commerce Commission said in a statement that the chain had taken steps to improve compliance but the pricing problems continued for too long.
“Look Sharp had frequent and widespread pricing errors over a substantial period of time, some of which meant customers paid as much as 33% more for a product than the advertised shelf price,” Commerce Commission general manager competition, fair trading, and credit Vanessa Horne said in a statement today.
“Incorrect pricing was so widespread by late 2022 that Look Sharp started to display signs in a number of stores that stated there may be discrepancies between label prices and actual prices.
“Businesses must get pricing right. Incorrect pricing has financial impacts and can lead to consumers feeling pressured at the check-out, which can cause stress, frustration, and loss of confidence.”
Between January 2021 and August 2023, Look Sharp also made several representations – through receipts, in-store signs, and its website – about customers’ right to refunds and exchanges for faulty products which directly contradicted the rights set out in the Consumer Guarantees Act.
These representations restricted the time frame for returns on faulty products to seven days and prohibited refunds and exchanges for specific product categories. For a time, Look Sharp also falsely claimed that Covid-19 restrictions prohibited all returns and exchanges.
The Consumer Guarantees Act required all goods to be of an acceptable quality, and outlined the consumers’ right to a remedy if something went wrong. Remedies included the right to return items within a reasonable time frame if the goods were faulty.
“These breaches ultimately originated in Look Sharp’s head office and reflected a major gap in processes,” Horne said.
“While we’re glad Look Sharp has taken steps to improve its compliance systems, we’re disappointed that no steps were taken before the commission intervened – despite consumer complaints to Look Sharp.”
‘Disappointed to learn of the errors’ — Look Sharp
In a statement, a Look Sharp spokesperson told 1News it “acknowledges that some representations made to customers breached the Fair Trading Act”.
The spokesperson said “most of the breaches” were related to measures implemented during the Covid-19 pandemic.
“Those measures were not implemented as well as they should have been. Look Sharp was disappointed to learn of the errors made, rectified them quickly, and has implemented measures to ensure such errors do not occur in future.”
They added that the company “cooperated fully with the Commerce Commission and entered guilty pleas at the earliest opportunity”.
“We accept the fine imposed by the court and sincerely regret any impact on our valued customers.
“Look Sharp always puts customers first, and we will continue to work hard to deliver a great shopping experience for our customers.”