If you run a small business and you've been tempted to try offering deals this way, this might be of interest.
Daily deals site Scoopon has been ordered to pay a $1 million penalty, the ACCC announced in a press release issued this week.
This might be of interest if you're running the type of business commonly seen on Scoopon.
The site advertises deals for things like travel, restaurants, massage, accommodation, beauty treatments, activities like skating and paintball, gym and golf membership and cruises.
The Federal Court declared Scoopon made "false or misleading representations" to (this information below is quoted from the ACCC press release):
- consumers about their refund rights, and the price of goods advertised in relation to some of its deals;
- businesses that there was no cost or risk involved in running a deal with Scoopon, when this was not the case; and
- a business that 30 per cent of vouchers that would be sold would not be redeemed, when there was no reasonable basis for this representation.
The ACCC reports that Scoopon "has worked to improve its systems and processes". This penalty "serves as a warning to other businesses in the industry," ACCC chairman Roid Sims said.
Sims stated earlier this year that "Businesses must have reasonable grounds when making representations to consumers and to other businesses."