Kogan fined AU$350,000 for offering 'discounts' on products with inflated prices

The online retailer has been fined yet again for making false or misleading representations to consumers.

Kogan fined AU$350,000 for offering 'discounts' on products with inflated prices

Kogan has been ordered by Australian Federal Court to pay AU$350,000 for misleading consumers by inflating the prices of products and then promoting "discounts" for these products. 

The court already found the company misleadingly inflated prices for its online retail sales back in July. Kogan hiked the prices of over 600 products and then promoted "discounts" for these products. Shortly after the sale ended, Kogan proceeded to reduce the prices of the affected products back to their pre-promotion prices. 

In most cases, prices increased by at least 10%, with the Australian Competition and Consumer Commission (ACCC) put forth in proceedings.

Since that judgment, the court has been working towards settling how much Kogan would be fined for its false and misleading representations, with Justice Davies finalising the AU$350,000 figure on Monday morning. 

"All businesses must ensure that their advertisements do not mislead consumers about the nature of a promotion, and that any promised savings are genuine," ACCC chair Rod Sims said.  

The issuing of the AU$350,000 penalty brings a close to the matter, which was commenced by the ACCC in May last year

Four years ago, the online retailer was fined AU$32,400 for similarly using false or misleading representations in a Father's Day promotion. At the time, the ACCC ruled the online retailer intentionally increased its prices before offering customers a discount.

Shortly after the revelation that Kogan yet again misled consumers, the online retailer reported that it continued to increase its net profit after tax (NPAT) despite the pandemic. For the 2020 financial year, Kogan amassed AU$26.8 million in NPAT -- a jump of 56% from the previous financial year.

Gross sales and revenue for the 2020 financial year also increased to AU$769 million and AU$498 million, respectively, which were increases of 39.3% and 13.5% from the prior year.

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