Berry is not the only social media sleuth to push retailers over their practices. Reddit users had accused Coles and Woolworths of misleading shoppers through discounts, and this ultimately led to a more detailed investigation from the ACCC, which launched legal action last month alleging the supermarkets offered “illusory discounts”.
Loading
Canada’s competition tribunal ordered popular movie chain Cineplex to pay a record fine of $C38.5 million for deceptive marketing practices over the company’s $C1.50 online booking fees. Two years before the fine, Reddit users were interrogating the practice when it was imposed.
The ACCC can’t take on most complaints, but the attention that social media environments drum up can bring consumer issues to the top of the regulators’ agenda, says Jeannie Paterson, a law professor at the University of Melbourne.
“Sometimes those consumer tip-offs do actually inform regulatory enforcement,” said Paterson. “Consumers do sometimes have an impact on what the regulator does – the [Hoyts] case is actually more direct than that. That’s the consumer putting the matter on social media and changed behaviour.
“Often, bringing a matter to light where a business cares about its reputation is a good way of changing what the business does, now businesses care about their reputation on social media. Social media has become a way of keeping businesses in check.”
Paterson says that social media can be a powerful tool to bring up complaints, but could be a way for competitors to co-opt the practice and bring down legitimate businesses.
Hoyts was approached for comment but did not respond by deadline.
Drip pricing is a retail term that refers to sales technique in which the advertised price of goods or services at the beginning of a transaction is not the same by the end based on extra added fees.
Associate Professor of Finance at RMIT University Angel Zhong said drip-priced items led to customer frustration by creating an initial price offering that is more competitive than their rivals’, so more customers are lured in despite the price not being accurately offered.
Loading
“It’s like a clickbait – so you can easily attract customers,” Zhong said. “This is a marketing tactic to tap on consumers’ inertia because throughout this purchasing process, as you invest more, more and more time to purchase process, you could be less likely to abandon to get transaction process.”
A dark pattern is a phenomenon in which once a consumer acts upon an item in their cart, they are less sensitive to extra fees because they have already committed to the purchase, whereas the upfront cost might outright deter the same consumer.
The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Sign up to get it every weekday morning.