After receiving complaints from retailers and consumers, the Australian Sporting Goods Association (ASGA) has called for a stricter compliance regime to be established for group buying sites.
ASGA executive director Brad Kitschke said consumers and retailers are complaining that original prices for items are being exaggerating on group buying sites to make the discount offered appear more attractive.
“There is no doubt that consumers are looking for a bargain, and we encourage honest competition in the market place. However, there are examples of group buying sites advertising original prices for products well above recommended retail prices in order to paint their advertised price more favourably and trick consumers into thinking they are receiving a greater discount,” he said.
“This practice is unfair on the Australian bricks and mortar and online retailers who demonstrate a level of honesty in their pricing. Consumers are given the false impression that online and bricks and mortar retailers are ripping them off and price gouging when this in not the case.”
The ASGA also wants group buying sites to come under greater scrutiny about product descriptions.
“We have had complaints that Group Buying sites provide product descriptions which give consumers the impression that they are buying products which can be compared, like for like, with products available from Australian retailers . Often this is not the case,” Kitschke said.
Earlier in November, a voluntary code of conduct for the group buying industry was jointly established by the Australian Direct Marketing Association (ADMA) and the Australian Interactive Media Industry Association (AIMIA).