In response, Australian Opal Cutters (AOC) has ceased its misleading price comparisons and removed an ACCC letter from its promotional material.
The Sydney-based retailer repeatedly referred to “normal retail price” in advertising from December 2005 till March 2009.
The “normal retail price” as defined by AOC was the price a consumer would pay for an item purchased from any competitor.
"The ACCC believes the market research did not provide a sufficient basis upon which a 'normal retail price' could be accurately determined or quoted," said ACCC acting chairman Peter Kell.
"By comparing its prices with the so called 'normal retail price' AOC was in danger of misleading consumers about the value for money they were getting.
Kell advised retailers who made price comparisons to ensure they had accurate, up-to-date figures that would withstand possible scrutiny.
From September 2007 to February 2009, AOC also included an ACCC letter in its promotional materials, alongside customer testimonials.
According to the ACCC website, the letter was sent in relation to an earlier investigation into AOC's claim that their opal products were "50-55% off normal retail prices".
The ACCC letter thanked the retailer for its detailed response to the queries, and advised AOC that no further action would be taken. AOC then exhibited the ACCC letter on its sales desk at its Pitt Street premises as part of a customer testimonials folder.
The ACCC believed this was inappropriate. According to Kell, it is not the role of the ACCC to endorse any products or advertising by any company: "The display of the ACCC letter alongside customer testimonials could wrongly lead consumers to conclude that the ACCC approved of or endorsed AOC's advertising practices," he said.
JAA CEO Ian Hadassin highlighted the role of JAA members in drawing this matter to the ACCC’s attention, and advised other retailers to take note of the regulatory body’s decision.
“I would advise those members who continue to adopt a two price advertising policy that they carefully review their methodology to ensure that they are abiding by the requirements of the Trade Practices Act,” he said.
“The JAA expresses its formal gratitude to the ACCC for taking action on the matter and achieving an outcome of which the JAA is fully supportive,” Hadassin added.