The Australian Competition and Consumer Commission (ACCC) has initiated proceedings in the Federal Court against prominent Australian household appliance chain, The Good Guys. The business is accused of making false or misleading representations about their store credit and 'Store Cash' promotions, in violation of the Australian Consumer Law.

The Good Guys ran 116 promotions between July 2019 and August 2023, offering consumers a store credit or 'Store Cash' if they spent a certain amount of money on qualifying products in its online or physical stores. The ACCC alleges that The Good Guys misrepresented that the only requirement to receive the store credit was to make a qualifying purchase. However, consumers were also required to opt in to receive marketing communications to receive a store credit.

"We allege that the conditions for consumers to receive a store credit as part of The Good Guys' promotions were not communicated adequately in The Good Guys' marketing materials," said ACCC Chair Gina Cass-Gottlieb. "We also understand that, for the majority of promotions, the store credit being offered expired within a very short period of time of ten days or less, which many consumers were unaware of."

The ACCC further alleges that The Good Guys represented that store credit or 'Store Cash' would not expire or would expire after a reasonable period, when in fact, for the majority of promotions, it expired within seven to ten days.

"We are concerned that as a result of the alleged conduct, consumers may have purchased products from The Good Guys which they might not have done otherwise," Cass-Gottlieb said.

The ACCC also alleges that The Good Guys failed to provide store credits to thousands of eligible consumers within the time specified in the offers, or within a reasonable time, in breach of the Australian Consumer Law.

"Even where consumers met the conditions, we allege that The Good Guys did not provide a store credit at all to many eligible consumers," said Cass-Gottlieb.

The ACCC is seeking consumer redress, penalties, declarations, compliance orders, publication orders, and costs. The Good Guys, whose parent company is JB Hi-Fi Limited (ASX: JBH), conducts its business from physical stores across Australia as well as online.

"Businesses should be on notice that promotional conditions must be prominently disclosed to consumers, rather than buried in hard-to-find locations, or they risk enforcement action under the Australian Consumer Law," said Cass-Gottlieb.

In an ASX statement parent company, JB Hi-Fi, acknowledged the proceedings.

"The Good Guys takes its compliance with the law very seriously and has a comprehensive compliance program in place. The Good Guys has always sought to provide value and benefits to its customers and has worked cooperatively with the ACCC throughout its investigation," the statement read.