The number of complaints made to the Commerce Commission about ‘daily deal’ sites has halved over the last year, as increased communication between the Commission and the group buying sites smoothed out the speed bumps of what is still, in New Zealand, a relatively new industry.
Daily deal and group buying sites allow customers to purchase heavily discounted goods and services, often requiring a preset number of people to sign up before the offer becomes available.
Competition Branch Manager Greg Allan says the Commission identified daily deal sites “as an area where we were increasingly likely to see complaints” in the first half of last year, when a number of companies joined the market.
Mr Allan says the Commission has focused on ensuring websites are informed about consumer law practices, and says it has been “heartening” to see sites taking action to improve their track record.
The makeup of companies in the market has also changed over the last year, with several leaving the market or undergoing changes of ownership.
The Advertising Standards Authority (ASA) also received a number of complaints about daily deal sites over the last year, several of which concerned offers where the information provided by the supplier – and put online by the deal site – was incorrect or misleading.
These included electronics equipment with the incorrect specifications listed, and a wine which was listed as “silver-medal” despite not having won any awards. In both cases, the daily deal sites said they had received the information from the individual service provider and had not been aware it was incorrect.
In a third case the copywriter at the daily deal site lacked the training required to ensure the advertising material was compliant with industry guidelines.
Although the incorrect information was provided by
individual traders, Mr Allan says the “fast-changing nature” of the deals means
websites need to ensure their suppliers are compliant before putting the offer
online.
“These deals are now targeting consumers in real time… we have to be ahead of the game, rather than picking up the pieces at the end,” he says.
Several of the ASA and Commerce Commission complaints have involved advertisements where the recommended retail price was inflated to lead customers into thinking they were receiving more of a discount than was accurate.
Mr Allan says while the number of complaints is decreasing, consumers “need to know their rights and do their homework” and should check deal conditions and contact the supplier if unsure about anything.
3 News