Walond Limited, commonly known as Look Sharp, has been fined $292,500 in 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.
"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 says.
"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," Ms Horne says.
A consumer who contacted the Commission about representations made by Look Sharp was a single parent who was financially struggling and emphasised that "every cent counts within my household budget."
Look Sharp also made a number of representations between January 2021 and August 2023 about customers' right to refunds and exchanges for faulty products which directly contradicted the rights set out in the Consumer Guarantees Act. These representations were made via receipts, signs inside stores, and Look Sharp's website.
These representations restricted the timeframe 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 requires all goods to be of an acceptable quality, and outlines consumers' right to a remedy if something goes wrong. Remedies include the right to return items within a reasonable timeframe if the good is faulty.
"Look Sharp is a large trader, with 20 different stores and a revenue of up to $44 million a year. These breaches ultimately originated in Look Sharp's head office and reflected a major gap in processes," Ms Horne says.
"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."
Background
In 2024 the Commission also warned Look Sharp Discount Store Limited, which is a separate entity that operates the Look Sharp online store, for representations it made to consumers about their rights under the Consumer Guarantees Act. The Commission believes these representations likely breached the Fair Trading Act.
The Commerce Commission is responsible for enforcing the Fair Trading Act. The Fair Trading Act is primarily concerned with trader behaviours that are likely to mislead consumers as to the price, performance or quality of their purchase. These behaviours can include anything from false claims about what a product is made from or where it comes from, through to key pricing details being hidden in fine print.
