Major supermarket chains across New Zealand have been challenged by the Grocery Commission to improve refund policies.
The Grocery Commissioner has challenged the major supermarkets to improve and publicise their refund policies, which the Commerce Commission believes are either inadequate or unknown to Kiwi consumers. Pierre van Heerden said this will create the commercial incentive for supermarkets to improve the accuracy of their pricing.
Van Heerden said accurate and clear pricing is a consumer right and expectation of a competitive market, but the Commission is still hearing about too many examples of misleading or inaccurate pricing in New Zealand supermarkets.
“Kiwi consumers expect and deserve better. The continuing level of pricing errors happening across the major supermarkets is simply unacceptable, and I don’t believe the major supermarkets are doing enough to fix these problems and get it right for the future,” said van Heerden.
The Grocery Commission said the responsibility for fixing the issues sits squarely with the senior management of Foodstuffs and Woolworths NZ, and the Commission had sought a commitment from the Chief Executives of each of the three companies.
Van Heerden added that he will introduce a mandatory disclosure standard that will require the major supermarkets to regularly disclose information about customer complaints, including around pricing and promotional issues. Making this information visible will help consumers be better informed and have more confidence that their complaints will be dealt with.
“Consumers should be able to trust that the price advertised is what they will pay,” he said.
“The groceries sector is a NZD $25 billion a year business, so even if errors only make up a very small percentage of sales, the total overcharge paid by Kiwis at the checkout would run to tens of millions of dollars every year and this is unacceptable.”
The Grocery Commissioner has also called out the major supermarkets’ processes for recording customer complaints – saying the lack of clarity and reporting means supermarkets can’t identify potential compliance issues within their businesses.
“Complaint data is a helpful source of information to identify trends and issues so they can be remedied.”
Van Heerden added that there was a general lack of clarity on how customer complaints are escalated and remedied. He said customers can play an important role in bringing pricing issues to the attention of supermarkets. However, current refund policies across the major supermarkets are either absent, inadequate in the benefits they offer, or not advertised clearly and prominently.
“A generous and well-promoted refund policy will help empower and motivate customers.”
The Commission has asked for supermarkets to demonstrate a commitment to review and amend refund policies and to motivate customers to bring any pricing integrity issues to their attention.
It has also asked that supermarkets prominently promote refund policies in store, online and through direct mail communications. The Commission has also asked that supermarkets ensure there are comprehensive policies, systems and processes to record and categorise all complaints about pricing and promotional issues, and appropriately train staff in these policies, systems and processes.
Van Heerden said these expectations of supermarkets are forward-looking to contribute to mitigating potential compliance issues in the future. These are separate from the ongoing investigations underway under the Fair Trading Act.
The major supermarkets have responded positively to the Commission, but Mr van Heerden said the Commission will be watching to see if they follow up their words with action.
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