Harvey Norman Franchisees Busted For Advertising Sale Goods They Didn't Stock

If a store has a good sale price on an item and it sells out before you get there, that's generally tough luck. But if a store advertises an item and never stocks it in the first place, it can be fined for deceptive practices. The ACCC just demonstrated that by issuing infringement notices six WA Harvey Norman franchisees for advertising a Kodak camera in a print catalogue but then never stocking it.

The ACCC fined the six franchisees because the practice of advertising an item that can't be purchased is classified as "bait and switch" behaviour. ACCC Graeme Samuel used the ruling to remind consumer of their rights:

Promotional material must be accurate and there must be adequate stock of the advertised product to meet reasonable demand, otherwise businesses risk bait advertising which is illegal.

This kind of ruling is why you'll often see small print in catalogues from major chain stores specifying which items are not on sale in certain stores, and why stores often specify quite precisely how many of a given item will be on sale. (It also reminds us that, oddly, individual Harvey Norman stores are not owned by a single franchisee -- the computer department is often owned by a different person to the furniture section, for instance.)

ACCC


Comments

    This is pretty hard on businesses but it fair for the consumer when we don't want to be wasting our time searching for a product that they lied about having. Personally I don't have too much concern because I'm more of a online shopper but Harvey Norman should be kept in line. Many other businesses get away with this so I guess this will be a warning to them.

    Good to see too, that someone who knew their rights complained about it. I'm tired of retailers doing dodgy stuff under the banner of "store policy" when it's actually in breach of the trade practices act. Of course when you kindly point it out you get blank stares or abuse in reply.

    Big W are big offenders of this, There has been to many times to count when they advertise something in a catalog and on the first day of the say (usually Wednesday) you turn up first thing in the morning to be told "sorry, sold out" or "stock hasn't arrived yet" "sorry, we had 1 but it sold"... how is 1 unit per store a "reasonable" amount of stock to supply if you have dropped 1M+ catalogs?

      Yep I work at Big W and its a joke how little stock we get for stuff advertised on sale

    And Gerry Harvey has the nerve to call people un-Australian because they don't like shopping retail.

    At least when I order something online, there's a reasonable chance it exists, and I'll receive it for the advertised price - which is a lot more reasonable than the insane markups Harvey Norman apply to their prices even compared to other local retaillers.

    Once upon a time, buying online was more risky than going into a store.

    As someone who works on the front line of a major chain retailer (not any mentioned so far) I actually hope this happens MORE often. Bigger fines would probably help too.
    If you think it's frustrating travelling an hour to get an advertised item that has either sold out due to not enough stock, or never arrived due to poor planning; try being the person who gets that frustration vented at them for 10 hours a day.
    Really I'd love to give you all the personal phone number of the person/s actually responsible, but I can't afford to lose my job.
    When you do suffer from this kind of thing at a retail chain, don't ask to speak with a manager, it wasn't their doing; call the head office.

    How do we find out that they've lied to us though? How did they find out in the WA case?

    oh, and thanks for the inside perspective blind_goldfish. I would never abuse the sales staff but it's a good tip to ring head office and take your complaint to the top!

    Could not agree more with a_blind_goldfish. I feel sorry for the franchisees. They receive instructions from head office to do such and such. it is Gerry the one that is the "Puppet Master". I wish that ACCC gets HIM hard on the wrist. He is THE biggest hypocrite ever, two faced person with no shame at all. And yet, he had the nerve to call the people that have supported the Ozzy retailers for so many years "un-Australian". It was ok once upon a time when he was making millions, but now that people have more choice and freedom, they choose to buy whatever they need/want at BEST prices without getting ripped off or tormented in his stores.

    Add Harris Technology in WA to the list. I recently had the same issue with them where they advertised a product that was available in all their stores except WA (their own web site showed where the stock was located). When I asked about getting some stock into Perth they told me I had to pay freight! I double checked fine print in the advertisement to make sure I hadn't missed anything and then threatened them with the ACCC. 1 week later I had my new toys.

    I'd like to be mature but suck it douche bags.

    Karma for trying to hard sell me on Monster HDMI cables and saying i was 'wasting my time' buying cheaper cables.

      I think that HDMI cables costing more than $10-$15 dollars is the biggest rort in recent Oz retail history.

      "But it's gold plated! GOLD!"

    I would love to see a comment from Harvey Norman in regards to this, they were vocal about imported items and how online is runining local business. Lets hear their excuse now.

    Do what have done. Get an ABN and buy wholesale!! Most of my wholesalers have min order of only $100 if any.

    Even better, if you get together with a bunch of mates and order in mass for more of a discount. Wholesalers always do cheaper prices for bulk orders.

    I never by IT gear retail.

    I think one of the biggest offenders were Strathfield, Everytime i went in my local store for something, they either dont have it stocked or they say they will be getting a shipment in soon, i remember going in there first day of a sale they had wanting a new car stereo system they had going for cheap, they said it had sold out before the sale had started.

    Long story short, i never went back there and they have now folded.

    PS... Strathfield was a small electronics retailer, i say this because i am not sure if they were nation wide or just a local SA business.

    No surprise, typical for Australian retailers I would suspect. Lost my business years ago, online is the only way to go. Harvey Norman will soon be wondering what happened? A bit like Borders...

    Glad Harvey Norman finally got busted for this. I have been caught a few times at the local HN with this. It is the old bait and switch. Put something in the catalogue, dont sdtock it, and then when you ask for it they try and sell you something else which is typically dearer. I hope more fines come from this.

Join the discussion!