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H Samuel fined for misleading consumers over online pricing

Signet Group plc

The owner of national jewellery retailer, H Samuel, has been slapped with a £60,000 fine after admitting to misleading consumers about price information presented online.

Signet Trading Limited, which owns high street chains H Samuel and Ernest Jones, pleaded guilty to 17 breaches of the Consumer Protection from Unfair Trading Regulations following an investigation by Torfaen Council’s trading standards service.

The charges all related to the company’s ‘Forever Diamond’ range of rings on offer for sale on the H Samuel website between November 2017 and June 2018.

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The jeweller was picked up on the use of ‘reference prices’ and ‘intervening prices’.

Reference pricing refers to price promotions which aim to demonstrate good value by referring to another, typically higher, price. Retailers must also show ‘intervening prices’ where an item has been on sale at a price lower than the higher ‘reference’ price. In many cases the highest reference price is not always the last price the item was sold at. In both situations, customers can be misled into whether they think they are receiving a proper bargain.

An infographic explaining reference prices and intervening prices.

Jonathan Elystan Rees QC, prosecuting on behalf of Torfaen County Borough Council, said the company’s actions meant shoppers were being influenced to make decisions based on misleading information.

Mr Elystan Rees said: “A large company that takes advantage of unfair pricing promotions not only causes detriment to the consumer, who is influenced to make a decision based on misleading information, but also those competitors who are investing time, effort and cost to comply with the guidance.”

In a hearing at Newport magistrates court on Friday February 8, the court heard that H Samuel’s website failed to inform consumers that items had previously been on offer for sale at lower ‘intervening’ prices.

This meant customers were unaware whether they were receiving a genuine bargain. H Samuel also made price comparisons on its website for materially longer periods than the higher price was offered.

Sam Evans, defending on behalf of Signet, said the company was of good character and deeply regretted the matter. He added lessons had been learned and the company had already been putting in place measures prior to the investigation taking place.

While the online sale of the discounted rings amounted to £200,000, Mr Evans said the actual gain by the company amounted to around £6,500.

District Judge Shomon Khan said the profile of the company was one in which the consumer would place a high level of trust but accepted that this was a system failing rather than a deliberate attempt to mislead.

He gave Signet credit for their guilty pleas, good character and co-operation with the investigation.

Judge Khan fined Signet £60,000 and ordered them to pay costs to the Council of £13,382.

Tags : H SamuelSignettrading standards
Stacey Hailes

The author Stacey Hailes

Editor, Professional Jeweller

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