Are your online sales tactics all good?

If you are using e-commerce platforms to sell goods online, chances are you may be using overseas based platforms and apps.

Sometimes these apps have features that could mean you end up using false and misleading sales practices that are not allowed in New Zealand.

For example, you might have installed an app with a promotional countdown timer that automatically repeats when the countdown has ended.

This app feature may influence your customers to act quickly to buy what they believe is a limited time offer. This could be misleading because that offer will remain available after the timer has reset.

If you claim an offer will end in 2 hours, then the price of the product should return to its presale price at the end of 2 hours – otherwise, you could breach the Fair Trading Act.

Same for claims about available stock – if you make a claim that there are ‘only 10 items left’, this must be true.

When selling online, including through an app, make sure that you only make accurate and truthful claims. You must be able to back up your claims with credible evidence. Check the apps you are using, with all the features available, keep you on the right side of the law.

Last year, the Commerce Commission issued a formal warning to online gift box retailer Occasion Box for making false and misleading claims, that were likely to mislead customers. They claimed that other customers had purchased products recently, which was not the case.

It turned out that Occasion Box had purchased an ‘off the shelf’ product from a third-party e-commerce provider overseas without understanding its obligations under the Fair Trading Act.

Commission cracks down on sales practices that mislead online shoppers(external link) — Commerce Commission

As the busy sales season is nearly here, take the time to review your online apps now.

Keep these points in mind:

• Do not assume that all e-commerce apps meet requirements under New Zealand laws.
• Check that the apps you use allow you to make accurate, truthful, and substantiated claims. For example, apps that allow you to draw on genuine data from your inventory so that you can prove, if you need to, that your advertising claims are accurate and truthful.

The Commerce Commission has guidance to help you to understand your obligations around online sales practices. If you are unsure about how to comply with the law, you should speak with a lawyer.

Online sales practices(external link) — Commerce Commission

False and misleading e-commerce apps can harm competition and reduce confidence in New Zealand markets. You can report misleading sales tactics to the Commerce Commission.

Make a complaint(external link) – Commerce Commission