Play it Straight with the Truth in Business
In the fairy tale, Pinocchio’s nose grew whenever the naughty puppet told a lie. That certainly made it easier for him to be caught out. Unfortunately, there seem to be many who think it is okay to lie or mislead in business.
This frequently seems to be the case with two price advertising – we have all seen numerous claims of 50% off or was $100 now $30 and the like – and reading the reports of the ACCC and others, many of these claims have less connection with the real world than Pinocchio!
No doubt they think the chances of being caught are small. But the consequences if they are caught can be quite significant – even if the ACCC does not take them to court. The latest to be named and shamed is Charles Tyrwhitt, a clothing manufacturer. It claimed that its ‘slim fit non-iron micro spot’ shirt `was’ $160 and `now’ $69. The ACCC found this to be misleading because:
- the `was’ price had only been advertised for a short time period, in a hard to find the location on the company’s website and
- the time period was so short, and the location so obscure, that no one had actually bought the shirt at the `was’ price.
The business was lucky to escape with an “on the spot” fine of $10,800, rather than being taken to court for its misleading claim, where the fine could have been $1.1 million per offence.
What does this mean for your business?
I always maintain that the damage to your business’ reputation by being caught out by the ACCC for making false or misleading claims is the biggest cost – even greater than the fines imposed by the Court. Remember the old adage and treat your customers and suppliers the way you want to be treated. If you treat them honestly and do not make claims that whilst technically correct nonetheless create a misleading impression, then you have nothing t0 fear from the ACCC.