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Kogan fined a cool $32K for hiking prices and fudging discounts

Is a discount really a discount if a store quietly hikes its prices before a big sale? Online retailer Kogan.com has been accused of doing just that, and it's copped a big fine in the process.

King of online retail, Ruslan Kogan.
Paul McMillan

Kogan has built a reputation as the king of discounting, but one of the online retailer's shonky deals has raised the ire of the ACCC and earned the company a king-sized fine.

Kogan.com has paid $32,400 in fines after the Australian Competition and Consumer Commission accused it of misleading customers over a Father's Day promotion last year. While Kogan advertised a 20 percent discount on selected products, the ACCC says the store actually put up prices before the sale started, meaning customers saved less than they thought.

The ACCC today confirmed the fines related to three monitors advertised on Kogan's eBay store in August 2015. The retailer offered 20 percent off if customers bought between one of the models between August 24 and August 29, but the consumer watchdog alleges that Kogan hiked prices on the products before the sale even started.

"As a result, although consumers received a 20 percent discount off the newly increased prices, they in fact only received a 9 percent discount off the previously advertised prices for each of the three computer monitors," the ACCC said in a statement.

After the discount ended, prices were pushed back down to pre-sale levels.

While the ACCC noted that the payment of fines is not an admission of guilt or of breaking Australian Consumer Law, Acting Chair Dr Michael Schaper said the case offered an important lesson for retailers.

"It is simply unacceptable for businesses to raise prices before applying a discount in order to give consumers the misleading impression that they are obtaining a larger percentage discount than is actually the case," he said.

And other businesses should take note, with Schaper warning that it's currently cracking down on "truth in advertising and consumer issues in the online market place."

Update, January 18 at 2:20 p.m. AEDT: Kogan declined to comment on the record.