Harry Potter fans are fuming over Big W’s $15 one day sale of the series’ most recent addition, “Harry Potter and the Cursed Child”. Big W advertised in its catalogue, on its website and through social media that the book would be for sale at the discounted price of $15 from 9.01AM AEST on Sunday. Unfortunately for many Potterheads, by mid-morning, the book had sold out. Some stores sold all the stock in as little as 13 minutes.
Big W told customers who missed out on the $15 price that they would have to wait until new stock came in and they could then purchase the book for the recommended retail price of $45.
Disgusted customers flooded Big W’s Facebook page with complaints after discovering that most stores had only stocked about 40 copies of the book and were expecting the unlucky customers who missed out on the $15 sale to purchase the book for $45.
Many customers claim that Big W’s advertising and $15 offer was misleading and deceptive and have threatened to contact the ACCC and report their advertising practices.
What is Bait Advertising?
The practice of offering a product at a low price to attract consumers is known as bait advertising. Under Australian Consumer Law, bait advertising is a legitimate form of advertising, and it is not considered a breach of the ACL to use low prices to attract consumers.
Two requirements must be met for bait advertising to be considered lawful. A reasonable quantity of the goods advertised as discounted must be made available and for a reasonable period.
Under section 35 of the ACL, the trader that offers the discounted price should consider the nature of the market in which they are carrying on the business and the nature of the advertisement. If a business is found contravening this provision, a pecuniary penalty may be imposed. A business must also clearly indicate if it intends to make the offer available for a certain period by using phrases such as “today only”.
Did Big W Use Bait Advertising?
Big W’s advertisement and offer for the $15 book could indeed be considered bait advertising. As there is nothing inherently unlawful about this, the ACCC must consider whether Big W provided a reasonable quantity of the books and whether they were made available for a reasonable period.
“While Stocks Last”
Big W advertised the discounted price as a “one-day only” sale. Customers expected the books to be available at the $15 price for the one day- this was not the case. So, did Big W stock a reasonable number of books to satisfy the demand?
While Big W used the phrase “while stocks last” in their print and advertising catalogues to qualify their one day sale, they failed to do so on social media. Consequently, customers who viewed an advertisement through Facebook or other social websites were not warned that the one-day sale only applied as long as stock lasted. No one would have thought that the stock would only consist of 40-50 copies.
Big W spokespeople had acknowledged their failing in this regard and declared that they are looking into their internal processes to make sure this sort of miscommunication and poor advertising does not occur again. But would this defence be enough to protect them from an ACCC inquisition?
No Rain Check
Many customers complained that when the $15 stock had run out, Big W told them they could purchase the book later for $45 (the retailer has since corrected this is to $20). Big W did not offer a ‘raincheck’ to customers who had gone to Big W for the one-day only sale with no success.
A business may be found in breach of the ACL if they do not offer a raincheck or an alternative corrective action in situations where it is likely that the offer will not be available at the advertised price.
Big W spokespeople have said that they had not anticipated the book to be such a hit and had been surprised by the unprecedented demand for the latest Harry Potter book.
Some customers are not convinced. Given that the stores did not offer a rain check for the $15 book, customers claim that Big W never intended to honour the advertised price.
If the ACCC investigated this incident, Big W would need to show that they genuinely believed the 50 books they held for the first day of sales would be a reasonable quantity.
Bait advertising in itself is not unlawful – it gives businesses an opportunity to attract customers. A business can be found in breach of the Australian Consumer Law, however, if their behaviour and practices surrounding bait advertising demonstrate unfair practices.
This is why the ACL requires a business to make a sale item available for a reasonable period and to offer a reasonable quantity so that consumers have the opportunity to purchase the good.
Here, the consumer argument is that Big W should have known that the eighth Harry Potter book was going to be a sellout and cannot realistically justify only ordering 40-50 books for each store – particularly when they had advertised the discounted price at almost half the price of other stores.
If an investigation were to occur, Big W would need to convince the ACCC that their “while stocks last” phrase was sufficient warning to consumers, and that it was reasonable only to order 40-50 books. Big W would also need to provide a valid reason for not providing rainchecks to consumers who were unlucky on sale day.
Watch this space for more updates and if you have any questions about bait advertising or our thoughts on Harry Potter and the Cursed Child, ask out consumer lawyers on 1300 544 755.