Kiwis could be losing "tens of millions of dollars" a year due to our supermarket giants' inadequate refund policies, the Commerce Commission says.
Now, Grocery Commissioner Pierre van Heerden is warning Foodstuffs North and South Island, and Woolworths New Zealand they must make urgent changes or face a mandatory refund regime.
"Things are difficult there and when supermarket pricing is incorrect and they're not refunding consumers, it's money out of pockets and it's food out of kids' mouths that are being taken," van Heerden told 1News.
"That has to stop."
He also pointed to the supermarkets' inadequate processes for recording customer complaints, saying that the lack of clarity and reporting means they are unable to identify potential compliance issues within their businesses.
"Complaint data is a helpful source of information to identify trends and issues so they can be remedied."
It comes as food prices increased by 0.6% in the 12 months to July, according to Stats NZ figures released today. It follows a 0.3% decrease in the 12 months to the end of June — the first drop in nearly six years.
The commissioner met with the chief executives of Foodstuffs North and South Island, and Woolworths New Zealand earlier this month warning them of his expectations around its refund policies and procedures.
"This is a $25 billion profitable industry and if you only take a very, very small percentage of errors on that, average Kiwi consumers out there are losing money and it can be tens of millions of dollars that are lost every year," van Heerden said.
The Commerce Commission has set out a range of expectations for the supermarkets, including:
- Review and amend refund policies to ensure they demonstrate a commitment by the supermarkets to pricing integrity and motivate customers to bring any pricing integrity issues to their attention. For instance, offering a full refund of the purchase price of mispriced goods
- Prominently promote their refund policies – in-store, online, and through direct mail communications
- Ensure there are comprehensive policies, systems, and processes to record and categorise all complaints about pricing and promotional issues, and appropriately train staff in these policies, systems, and processes
Foodstuffs, Woolworths NZ respond
In a statement, a Foodstuffs spokesperson told 1News it's reviewing its refund policy and customer complaints tracking systems.
"Our local grocers firmly believe the price on the shelf is what customers should pay. Our supermarkets stock thousands of products, and we put a lot of focus on making sure our prices are correct at the checkout. If there's a mistake, we will put it right quickly and refund customers if they've been overcharged," the spokesperson said.
"We are reviewing our refund policy and customer complaints tracking systems and will carefully consider the Grocery Commissioner's recommendations as part of that review."
In a letter addressed to the commissioner last week, Woolworths New Zealand said it is "in the final stages" of updating its refund policy, and work is underway to ensure their "customer complaints systems and processes are fit for purpose and consistent across all of the channels through which we receive complaints".
However, the Grocery Commissioner said he wants refunds to cover the entire product, not just the amount customers are being overcharged.
Van Heerden vowed to introduce a mandatory disclosure scheme "so that we can put requirements out there and say, 'this is what we want to see from you'".
"We will keep an eye on the number of complaints coming through as well."
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