The Warehouse has been fined almost $210,000 for breaching the Fair Trading Act. The company pleaded guilty to the charges, laid by the Commerce Commission.
The charges involved breaches in which the commission said The Warehouse had misles consumers about the advertised price of goods, used bait advertising (advertising goods without sufficient quantities being available in stock), made false claims that certain products were "exclusive to The Warehouse", and used false labelling on some of their duvets.
Commenting on the $209,600 in fines imposed in Auckland District Court today, Commerce Commission director of fair trading Adrian Sparrow said The Warehouse had to improve its staff training and compliance systems.
"When a company such as The Warehouse breaches the Fair Trading Act thousands of consumers can be seriously affected. Competitors that do comply with the Act also suffer."
Mr Sparrow said it was "particularly disappointing" to have to take action against The Warehouse as, under a 2004 Commission settlement, they had undertaken to improve both their staff training and compliance programmes relating to the Fair Trading Act.
"While The Warehouse did implement some Fair Trading Act compliance training as a result, it appears that they did not significantly enhance their compliance systems until 2008 - some time after the present proceedings were initiated."
Judge David Harvey said "the behaviours are still demonstrative of carelessness and lack of cohesion within a large retail organisation, well known throughout New Zealand which advertises heavily in all media".
He said he would have expected such an organisation, with "no doubt a significant advertising budget", would ensure compliance with the Fair Trading Act.
