A recent announcement from the Australian Competition and Consumer Commission (ACCC) has highlighted areas of concern that will be targeted in the year ahead, and jewellery business owners would be wise to take notice.
The so-called consumer watchdog has declared that misleading advertising and retail pricing practices will be its primary focus areas this year.
These investigations, it was said, aim to address competition and consumer concerns within retail, ensuring the 'proper functioning' of local markets.
Special emphasis will be placed on social media conduct and digital businesses. While continuing to monitor broader consumer and fair trading issues, deceptive advertising practices related to social media influencers and online reviews will be targeted.
There will also be heightened scrutiny on environmental claims, specifically identifying and curbing greenwashing practices. While these priorities are not new, they reflect ongoing concerns, and are important for the jewellery industry.
The ACCC previously established a task force to focus on sustainability, exploring the intersection of environmental issues and competition and consumer law.
This is especially relevant for jewellery retailers given common claims around the supposed 'environmentally friendly' nature of lab-created diamonds.
It was said that because consumers are increasingly factoring environmental considerations into their purchasing decisions, the ACCC highlights the importance of transparency and accuracy in these claims.
The ACCC published the results of a sweep examining businesses that engage in 'greenwashing' practices, and it was found that the fashion sector exhibited the highest rate of concerning claims. More than half of the businesses reviewed were found to be making potentially misleading claims about their eco-friendly credentials.
Jewellery can be a highly technical industry and keeping up-to-date with the latest changes in terminology can be challenging.
The World Jewellery Confederation (CIBJO) is frequently cited as a valuable resource for jewellery retailers in this area.
The Diamond Terminology Guideline is a valuable reference point, particularly concerning lab-created diamonds.
It states that the following qualifiers are acceptable - ‘synthetic’, ‘laboratory-grown’ or ‘laboratory-created’. Abbreviations such as ‘lab-grown’ or ‘lab-created’ should not be used.
Similarly, ‘cultured diamonds’ or ‘cultivated diamonds’, ‘cultured’ and ‘cultivated’ refer exclusively to organic/biogenic products. This also applies to terms such as ‘real’, ‘genuine’, ‘precious’, ‘authentic’ or ‘natural’ - as those apply exclusively to natural minerals and gemstones.
The guideline aims to encourage the full, fair, and effective use of diamond terminology by all sector bodies, organisations, and traders.
Any other issues?
Recently, the ACCC swept more than 2,000 retail websites, uncovering significant issues related to return policies.
The review highlighted several common clauses in the terms and conditions of retailer websites that could potentially contravene the law. It was clarified that under the ACL, retailers are prohibited from asserting that "no refunds are available under any circumstances."
The report also addressed problematic policies, such as refusing refunds on discounted or specialised items, items that have been opened or used, and imposing arbitrary timeframes within which refunds can be offered.
This serves as an important reminder for retailers to prioritise two key areas that particularly affect jewellery stores: consumer guarantees and the prevention of false or misleading practices.
It’s important to understand that the ACCC defines misleading advertising as any advertising or marketing communication that deceives or can potentially deceive consumers.
This might include false or misleading claims, omissions or half-truths, and deceptive visual representations.
Any information or claims a business provides about its products or services must be accurate, truthful and based on reasonable grounds.
This includes information on prices, images and descriptions of what is offered, claims about the value of products, shipping options and delivery times, benefits, qualities, and performance of products and services.
Standards apply to any communication by a business, including advertising, packaging, a quote, information provided by staff verbally or in writing, social media content, testimonials, websites or other platforms.
Under the ACL, it’s illegal for businesses to engage in misleading or deceptive practices. Businesses engaging in these practices can face penalties, fines, and orders to compensate affected consumers.
What’s at stake?
As a luxury product, the value of jewellery can be subjective, and its appeal can vary depending on personal preferences, cultural significance, and emotional connections.
It’s a highly technical industry and it’s often difficult for consumers to grasp complicated terms and definitions. Advertisers frequently play on emotions, especially during milestones such as engagements.
These factors, and many more, can lead to issues with misleading advertising. However, adhering to these rules is about more than just avoiding penalties. It’s about preserving consumer trust in the jewellery industry, especially when it comes to natural and man-made diamonds.
These rules are essential because trust is the foundation of the jewellery industry. Just as suppliers and retailers rely on open and honest communication to conduct business, consumers rely on jewellery retailers to faithfully ‘fill in the blanks’ and guide them to the right product.
Preserving this trust is critical for the future of this industry, and any misleading advertising threatens to sour the relationship between jewellers and consumers.
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