What happened

Walond Limited, commonly known as Look Sharp, was recently fined NZ$292,500 by the Auckland District Court after pleading guilty to six misrepresentation charges under sections 13(g) and 13(i) of the Fair Trading Act 1986 (FTA). An investigation by the Commerce Commission (Commission) found that between January 2021 and August 2023, Look Sharp had made misleading representations about its product prices as well as consumers’ rights to refunds or exchanges for faulty products under the CGA.

Pricing inaccuracies

According to the Commission, Look Sharp’s pricing errors were frequent and widespread, even to the extent that some customers ended up paying up to 33% more than the actual advertised price. By late 2022, the issue had become so prevalent that Look Sharp started displaying signs in multiple stores, warning customers of the potential price discrepancies.

The Commission emphasised that “businesses must get pricing right,” as understandably, pricing inaccuracies can strain consumers financially and create pressure at the check-out, leading to stress, frustration and loss of confidence in the businesses themselves. One consumer, who had alerted the Commission to the inaccuracies, emphasised that “every cent counts within my household budget”.

Misrepresentations about consumers’ rights

In addition to pricing discrepancies, Look Sharp was also found to have misrepresented consumers about their rights regarding returns and exchanges. Look Sharp’s misrepresentations were made via receipts, in-store signs, and its website with the effect of:

• limiting returns for faulty products to a seven-day timeframe;
• prohibiting refunds and exchanges for specific product categories; and
• wrongly claiming that Covid-19 restrictions prevented all returns and exchanges.

Under the CGA, consumers are entitled to certain guarantees when purchasing goods and services. Where a CGA guarantee is breached, consumers are entitled to statutory remedies such as repair, replace or return. The CGA guarantees cannot be contracted out of by the manufacturers or suppliers.  However, Look Sharp’s returns and exchanges policy contradicted and denied consumers their rights and remedies under the CGA, including by imposing a time window for returning faulty products.

Surprisingly, back in 2024, the Commission had already warned Look Sharp Discount Store Limited - an independent entity operating the Look Sharp online store - about similar misrepresentations, this time about consumers’ inability to return faulty goods due to timing and Covid-19 restrictions. The Commission’s warning letter to the company made it clear that in the Commission’s opinion, these misrepresentations likely breached the FTA.

What does this mean for you

This case reflected serious internal compliance failures and serves as a timely reminder for businesses of all sizes to regularly review their compliance procedures and policies around consumers' rights.

While the Commission acknowledged Look Sharp had taken appropriate steps to improve its compliance systems, it expressed disappointment that changes only occurred after regulatory intervention, despite numerous consumer complaints. Businesses should be implementing routine reviews of their consumer rights policies, while maintaining appropriate oversight, to identify and address potential breaches early, preventing regulatory action and maintaining consumer trust.

Get in touch

Detailed fact sheets and other resources are available on the Commission’s website on how businesses can comply with the CGA and FTA. However, if you are concerned that your business may be at risk of breaching the FTA or CGA and/or need any assistance, please get in touch with one of our experts. 

Special thanks to James Burnett for his assistance in writing this article.