Public consultation begins on unfair sales tactics

'Half-off' items at supermarkets, meal vouchers that expire quickly - the public is being asked to help define retail cheating as part of new law

PUBLISHED : Saturday, 08 December, 2012, 12:00am
UPDATED : Saturday, 08 December, 2012, 4:10am

Shoppers will benefit from a public consultation that will help define sales tactics that are misleading or induce them to make purchases.

This follows the passage of a law earlier this year to prosecute people who use unfair trade practices.

Terms such as "sale" or "reduced price" should be used with caution, according to the consultation paper put out by the Customs and Excise Department and Communications Authority - the future enforcers of the amended Trade Descriptions Ordinance.

A typical scenario laid out under the proposed guidelines involves a supermarket shopper seeing two price tags on display - the original price and a discounted one. An experienced consumer distrusts the "discount", knowing the "original" price could have been marked up a week ago.

But people who shop less frequently may think it is a bargain.

"If the presentation of prices makes people think it is a big bargain that turns out to be false, such behaviour could constitute a misleading omission," Customs and Excise Commissioner Clement Cheung Wan-ching said.

A price should be quoted as original only if it has been applied to goods or services for at least seven days in a row, the paper says. The document lists examples of the types of action that will be deemed illegal or unscrupulous from the second quarter next year.

If a beauty centre promotes a stem-cell transfusion service performed by a doctor without advising the client of the risks before he pays, the centre may be guilty of a misleading omission.

Businesses that state their prices or amount of goods or services in unreadable small print may also be found liable.

A trader that accepts advance payment with no intention or ability to supply a product within a reasonable time may be found to have wrongfully accepted such payment. For instance, a beauty salon should not sell a service plan that it can provide only after six months, nor can a restaurant sell an excessive number of discount vouchers to diners if they cannot be redeemed within the validity period.

Harassment or coercion using abusive language would fall under "aggressive commercial practices", which are to be banned.

But service providers say the guidelines are too vague.

Nelson Ip Sai-hung, founding chairman of the Federation of Beauty Industry, said the sections on misleading omissions and aggressive practices were ambiguously worded. "We need a clear list of points about what can be done and what can't be done, or operators will be unable to avoid breaking the law."

He pointed to a situation where a patron at a beauty centre might be receiving a treatment while not fully dressed and is pitched another service. The government might classify that as an aggressive commercial practice. "If promoting packages to a naked customer is aggressive, how about to one in underwear?"