NSW Fair Trading will be asking the State’s retailers offering cash back incentives to substantiate their claims, as part of a national project by Australian consumer protection agencies.
In an ever-competitive retail market, businesses have established a trend offering ‘cash back’ promotions as a discount, designed to encourage consumers to purchase products. However, the process required to reap the cash back reward is often elaborate and in many cases, consumers would prefer the discount upfront.
Between 1 January 2013 and 12 March 2014, Fair Trading has received 61 complaints and 17 enquiries about cash back offers. Most complaints related to the sale of electronic goods and appliances, with other complaints received in relation to furniture, building supplies and even cosmetics and toiletries.
Fair Trading Minister Stuart Ayres said that businesses running cash back promotions must ensure consumers are not misled about the benefits.
“Saying a customer will receive cash back from a purchase when they will actually receive a gift card is potentially misleading and should be avoided”, Mr Ayres said.
”Advertising should be clear and carry the price before cash back, rather than the price after cash back”.
“A business operating a cash back promotion should make every effort to make the application process as easy as possible. It is disingenuous to make the process too long or cumbersome in the hope that claims will be abandoned”.
The maximum civil penalty for providing false or misleading information is $1.1 million for a corporation and $220,000 for an individual. Criminal penalties for the same amounts may also be imposed.