Jewellery Store - Ordinary Price Claims

The Competition Bureau initiated an inquiry on May 3, 2002 into the marketing practices of a jewellery retailer with stores in Regina and Vancouver. The inquiry was part of a Bureau crackdown in the retail jewellery industry on the use of false or misleading ordinary price representations to lure potential customers away from competitors.

Over an 18-month period, Bureau officers observed the retailer's advertising practices and found that nearly 90 per cent of the time, it was advertising karat gold chains as being on sale at significant discounts from marked prices. Similarly, in-store advertisements featured large discounts on diamond karat gold rings and assorted pendants and bangles. Bureau officers also noted that the sales staff automatically offered prospective customers discounts from the marked prices. The Bureau observed similar advertising practices in the Regina outlets.

Based on these observations, the Bureau believed the company was contravening the ordinary price claims provision of the Competition Act, subsection 74.01 (3). This provision prohibits retailers from advertising ordinary price claims without selling a substantial volume of the product, or offering the product, at that price or a higher price in good faith for a substantial period of time.

The Bureau held subsequent meetings with the retailer to resolve the issue. However, on April 9, 2003, the retailer's counsel advised the Bureau that the company was closing its operations in the Vancouver area. Meanwhile, the remaining outlet in Regina assured the Bureau in writing that it would cooperate and ensure that its practices conform with the Act.

The inquiry was discontinued on September 18, 2003.

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