Would your scarcity marketing strategy pass the test of Australian regulators? While tactics such as countdown timers and limited-time banners are often standard practice, all that might be about to change due to intense legal scrutiny from the Australian Competition and Consumer Commission (ACCC).
Why’s the ACCC cracking down on scarcity marketing?
The ACCC is Australia’s economic watchdog. One of its primary goals is to promote fair competition and enforce the laws that protect consumers and businesses alike. Essentially, it’s responsible for ensuring businesses are held accountable for any misleading or unethical practices.
Recently, the ACCC investigated Emma Sleep over deceptive marketing practices that occurred between 2020 and 2023. The Federal Court found that the company prioritised immediate sales over transparency and used tactics that were deemed a breach of Australian Consumer Law. These tactics included using:
- Misleading strike-through prices that insinuated a product was on sale, even though it hadn’t been sold at the higher price advertised for a reasonable length of time.
- False countdown timers that suggested a sale period would end shortly, only to have the clock reset or the promotion continue indefinitely.
- Manufactured urgency, which used inaccurate data to create a false sense of scarcity, pressuring consumers into making hasty purchasing decisions.
This ruling resulted in a major $15 million penalty for Emma Sleep and has prompted the ACCC to conduct a major review of 50 other Australian retailers. This ongoing investigation focuses specifically on how these retailers advertise during busy sale periods, such as Black Friday and the end of the financial year (EOFY).
How to avoid negative scarcity marketing tactics
You’ve worked hard to earn the trust of your customers, and as a reputable brand, the last thing you want is to mislead them. Nor do you want to end up with a hefty penalty from the ACCC. But during busy sales periods, how do you cut through the noise while maintaining transparent and honest advertising?
Here are a few tips to help you avoid the negative scarcity marketing trap:
- When using strike-through prices, ensure they reflect actual past sales. If you haven’t sold the product at that price, don’t use it as a reference for a discount.
- Commit to firm promotional end dates when using countdown timers or sale banners.
- Sync your website’s stock indicators with real-time inventory data. This ensures that urgency cues, such as ‘only three left,’ reflect actual warehouse levels, rather than misleading consumers with false scarcity.
- Disclose all offer exclusions clearly, and in a prominent way, rather than hiding them in the fine print.
By prioritising transparency and accuracy in your advertising, you’ll build a digital strategy that earns long-term customer loyalty and stays ahead of any regulatory shifts.
If you’d like support with managing your season ad campaigns, please send us a message.
