According to multiple media sources, a leaked email has revealed that UK-based jewellery chain, H.Samuel, directed its staff to increase gold jewellery prices in order to make discounts during an upcoming “Gold Price Crash” sale seem sizeable.
Victoria Salisbury-Scott, store operations co-ordinator of H.Samuel’s parent company Signet, reportedly sent an email to staff dated 17 February saying, “Due to the success and significant lift in sales that you saw last year from the Gold Price Crash activity, we would like to repeat this during spring/summer 2014.
“In order to do this, we have to offer our products at a higher gold price for four weeks in accordance with trading standards regulations.”
According to UK-based newspaper Daily Mail, price changes following the correspondence included a gold St Christopher’s pendant that increased from £95.99 (approximately AU$180) to £129 (approximately AU$242), and a gold cubic zirconia entwined heart pendant that retailed for £129 (approximately AU$242) from an original price of £71.99 (approximately AU$135).
It is important to note that the UK Department for Business Innovation and Skills’ Pricing Practices Guide states, “A price used as a basis for comparison should have been your most recent price available for 28 consecutive days or more,” meaning that while misleading, H.Samuel’s controversial practice is not illegal.
A Signet spokesperson reportedly pointed this out in response to accusations, saying, “Signet has policies and procedures to ensure its pricing practices meet government standards in all respects”.
The Pricing Practices Guide also states, “If you have offered the product at a lower price for any significant period…this should be stated. What might constitute a significant period will depend on all the circumstances.”
This legal grey area harkens back to the Zamel’s case which found that the Australian jewellery retailer’s use of two-price advertising misrepresented the savings consumers would make from purchasing jewellery items during catalogue sales.
Commenting on the ruling, Jewellers Association of Australia (JAA) Code of Practice chair Colin Pocklington told Jeweller, “While the Zamel’s decision gives additional clarity to the law in some areas of two-price advertising, other aspects are still unclear”.
The JAA has since discussed the ramifications of the Zamel’s case with its members and updated the Industry Code of Practice accordingly in an effort to assist jewellers to implement advertising practices that will meet consumer law requirements, and achieve best practice.
Larger issues however, surrounding consumer deception – such as how to monitor online practices – have yet to be addressed.
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