Retail

These Schemes Ain’t Loyal says ACCC Draft Report on Customer Loyalty Schemes

The Australian Competition & Consumer Commission (ACCC) recently released its draft report on customer loyalty schemes, which has raised concerns about the actual benefit to consumers of such schemes and the use (or rather misuse) of consumers’ data. Preliminary Findings and Concerns At a high level, the ACCC’s main concerns (as set out in the report) focus on the following key areas: whether consumers actually receive the benefits advertised by customer loyalty schemes; unilateral changes to loyalty scheme terms and conditions – such as reduction of ‘earn rates’ and ‘redemption values’; poor communication of how the respective schemes work – …

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Subscribed, Sealed, Delivered – Embracing the Subscription Box Retail Model

The Australian retail sector is experiencing significant structural change – and this leaves businesses with no choice other than to start thinking outside the box…or rather think about the box itself… Enter the subscription box. By paying a regular fee, subscribers can receive a recurring delivery of products, often picked for the customer by the supplier.  This model has gained traction in the US with several large clothing and accessory brands rolling out subscription services which looks set to transform the way customers access their favourite brands and products. However, as with any model that involves engaging with consumers in …

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No More Sugar Coating: Government Orders Review of Nutrition Labelling for Added Sugars

They say you are what you eat…. But it’s doubtful that most Australians would be comfortable saying that they are the 10 (or more) teaspoons of sugar they consumed in their last can of soft drink.  However, we may well soon be confronted with these images given that labelling that displays this information pictorially is set to be considered by Food Standards Australia New Zealand (FSANZ) as part of a recently announced review of nutritional labelling for added sugars (the AS Review). This comes as a timely reminder for businesses that manufacture, package and supply food and beverages to ensure …

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Back to school: Consumer rights training required

The fast-paced retail environment poses a high risk for businesses to make false, misleading or deceptive representations about products and consumer rights under the Australian Consumer Law (ACL).  With the Australian Competition and Consumer Commission (ACCC) having the power to impose considerable pecuniary penalties, businesses should be aware of their obligations under the ACL and ensure that staff are given adequate training. Consumer Guarantees The ACL provides that certain guarantees attach to goods and services sold, leased or hired in Australia that have a retail value of less than $40,000, or are valued at over $40,000 but have been purchased …

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Customer data: What you should know

As online channels become an increasingly important part of retail businesses, organisations are increasingly collecting customer data in the course of trade. This information is rich with insights that can be used by organisations to track consumption patterns, effectively target their advertising to particular consumers or particular groups of consumers and directly contact consumers. With significant penalties for non-compliance, it is important for businesses to be aware of legal obligations that apply to dealing with this information. Accordingly, below we set out an overview of key considerations under Australian law. Privacy Handling of Customer Data The handling of customer data is …

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Returning faulty gifts: New year, new product returns?

There’s always that one present under the tree. It doesn’t quite fit right or maybe doesn’t work once plugged in…Remember to not only remain calm, but both consumers and retailers should also ensure that they are fully aware of their rights and obligations under the Australian Consumer Law (ACL). According to the ACCC website, the Australian competition watchdog received nearly 34,000 contacts about consumer guarantee related issues in 2018 alone – an increase of more than 17 per cent compared to 2017. This article will outline both the rights of consumers and obligations of businesses when dealing with the return …

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A Christmas credit carol: Advertising consumer credit

As we move into the festive season, personal finance such as credit cards and loans become increasingly attractive to consumers so they can spread the Christmas cheer. Offering finance options are a great way to get customers through the door, however, businesses should be aware of requirements that apply to advertising consumer credit under the National Credit Code (NCC), which is contained in Schedule 1 of the National Consumer Credit Protection Act 2009 (Cth). Applicability The NCC is regulated by Australian Securities and Investments Commission (ASIC) and applies to ‘credit contracts’.  These are agreements that have the following features: the …

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Marketing warfare series – Part II: Comparative advertising

A strategy often used by competing brands is comparative advertising. With numerous cases brought in the Federal Court of Australia each year and the potential for considerable pecuniary penalties, businesses should approach this strategy with caution. What is comparative marketing? Comparative advertising is, as its name suggests, an advertisement that compares a product or service with the equivalent offering of a competitor. This is usually done to highlight limitations of the competing offering and demonstrate the promoted offering’s superiority. Businesses may draw comparison with the competing offering: directly – by referring to, or displaying the offering e.g. use of images …

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Consumer law update: Headline pricing and expanded investigatory powers

On 26 October 2018, the Treasury Laws Amendment (Australian Consumer Law Review) Act 2018 (Cth) came into effect, amending a number of key provisions of the Australian Consumer Law (ACL) and extending investigatory powers available to the Australian Consumer and Competition Commission (ACCC) and Australian Securities and Investments Commission (ASIC). This comes as a timely reminder for businesses to ensure compliance with the ACL and particularly the changes to headline pricing practices. Headline pricing From 26 October 2019, vendors (i.e. any business or individual selling goods or services) will be required to include all optional fees and charges that are …

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Cosmetics Labelling Guide Released by ACCC

Recently, the Australian Consumer and Competition Commission (ACCC) released a guide on labelling requirements that apply to cosmetics products sold in Australia. This comes as a timely reminder for businesses that produce and supply cosmetics products to ensure that they comply with mandatory standards under the Trade Practices (Consumer Product Information Standards) (Cosmetics) Regulations 1991 (Cth) (the Mandatory Standards). Application of the Mandatory Standards The Mandatory Standards apply to cosmetics products, which are classified as any substance or preparation intended for placement in contact with any external part of the human body, including the mouth and teeth, that functions to: …

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New rules for imported foods into Australia

We’ve all come to love those delicious exotic delicacies in our fridge originating from around the world. But these imported foods are not always as harmless as they seem and can pose serious health risks such as the tropical fruit cassava and the Sardinian cheese, Casu Marzu. Two weeks ago, on 21 September 2018, the Imported Food Control Amendment Act 2018  (the Amendment Act) received royal assent.  The Amendment Act introduces various changes to the previously existing Imported Food Control Act 1992 with the aim of improving food safety and addressing health risks in Australia caused by imported foods.  These changes are …

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Ethical credentials in retail – upcoming changes you need to know

With modern slavery reporting requirements likely to commence in the near future in Australia, there is a renewed focus on the ethical sourcing of retail and clothing products.  Specifically, in August this year, the ACCC re-authorised the Homeworkers Code of Practice (the Code) for a further ten years. The Code is voluntary for manufacturers within Australia and aims to ensure that workers receive appropriate entitlements (i.e. wages and legal protection) for their work in the textile, clothing and footwear industries.  The workers who the Code is aimed at are those who perform their work from their home or another premise that would …

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Food Standards Code: Mandatory Warning Labelling Update

On 26 May 2018, products containing the legume Lupin became subject to mandatory allergen warning requirements under the Australia New Zealand Food Standards Code (the Code).  It’s inclusion is a timely reminder for businesses to ensure that their product labelling includes warnings required by the Code. Mandatory Warnings By operation of Standard 1.2.3 of the Code (the Standard), food manufacturers must label their products with a warning when a designated allergen may be present as an ingredient or compound ingredient, food additive or processing aid.  These allergens include Milk, Eggs, Peanuts, Tree Nuts, Cereals containing Gluten, Seafood, Shellfish, Soy, Sesame Seeds …

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Social Media Marketing and Advertising Update: The Rising Star of the ‘Micro Influencer’

Businesses are increasingly questioning the value of “celebrity” social media influencers and appear to be favouring partnerships with “micro influencers” as a more cost effective marketing strategy. A “micro influencer” is a social media user with between 1,000 to 90,000 followers who, like a traditional influencer, makes posts promoting products.  Their key advantages include use of products out of real loyalty to a brand (in some cases), smaller and more intimate followings and, as a result, the perception of genuine endorsements by their followers.  “Micro influencers” also require much lower remuneration, if any, and exist in greater abundance than “celebrity influencers”, and …

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Full Federal Court provides further insight into the use of ‘natural’ in product branding and advertising

Natural skin care products, natural beauty products, natural cosmetics…the list goes on.  These so called ‘natural’ products are on-trend and are in high demand in the Australian and Asia Pacific retail market.  The rise of consumer demand for natural products is a result of its association with health and wellness and as the Australian Competition and Consumer Commission (ACCC) described it, ‘Suggests that a product is superior because it has certain natural characteristics’. However, any business thinking of using such ‘natural’ claims on their labels must use caution and ensure that any such representations are not misleading and comply with the Australian …

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