Dubai fines retailers that mislead customers with fake discounts

How many times have you rushed to a shopping promotion promising up to 75 per cent off, only to find out that the after-discount prices don’t seem to be so low when compared to what you believed their original price was when you scanned them earlier?

While you had to bank on your memory, until now, to recollect what the price was before the ‘sale’, Dubai’s Department of Economic Department (DED) has now put in place a mechanism whereby it double-checks the before and after prices of items on sale, and has in fact fined a number of firms that have misled customers on the extent of discounts on offer.

In a statement issued today, the DED said it has issued fines of up to Dh250,000 on various stores in Dubai for manipulating Sales and Promotions licenses granted to them. The DED’s Commercial Compliance and Consumer Protection Division (CCCP) fined the stores after they were found to have violated the provisions for obtaining such permits and presented wrong information on the discounted prices displayed.

The DED formed a specialised ‘Double check’ team earlier this year under the supervision of CCCP and the Business Registration and Licensing Division (BRL) to verify data provided by companies against the price list approved by DED. The team examined more than 16,000 products during the first half of 2012, and seized at least 800 of them that were being sold in violation to the data provided to DED.

“DED formed the ‘Double check’ team after it was found that a number of stores have been providing inaccurate data and misguiding customers, especially tourists, claiming that they are offering up to 75 per cent discounts. The special team was aimed to shore up confidence among investors, businessmen and traders and to facilitate commercial activity in Dubai,” said Omar Bushahab, CEO of CCCP Division.

Bushahab added that the move also reinforces the fact that DED will not allow anyone to jeopardise Dubai’s reputation. The offenders have signed a pledge not to repeat the offense, and will compensate all those affected by their fraudulent practice.

“The Double check team monitored outlets, particularly during the period from March until May 2012, read all encrypted prices, photographed the goods before and after the promotional offers, and gathered the prices in the store’s data systems and compared them with data submitted to DED. Offenders were fined under Article 14 on the rules of fines (providing incorrect data to DED) or Article 55 (mismatch between the price list approved by DED and the price list of the goods offered). A committee has been formed to review future requests from violated companies,” added Bushahab.

Mohammed Shael Al Saadi, CEO, BRL Division said: “The Double check team also studies the cases classified by CCCP as not abiding by the requirements of sales and promotions, and demands such companies to provide valid information on prices before and after the promotional discounts. The number of such companies is very small – between two to four – at the emirate level, but they have branches in Dubai as well as other emirates.”

This initiative is part of DED’s continuous vigil to maintain the reputation of Dubai as a business and tourism destination, ensure full transparency in business transactions, and control commercial fraud and its negative impact on customers.

Shael stressed that the DED methodology is transparent and credible in implementing laws and regulations on commercial activity. The department provides a package of licenses on sales and promotions for varying periods to provide opportunities for businesses to make use of such marketing opportunities.

“We have also met with the violating companies to explain potential future action on granting permits. The ‘Double Check’ team will monitor the offers and check prices for a period of six months (extendable). For companies that adhere to the requirements of the Law of Commercial Control, the procedures will be simple and do not exceed one hour. But in the case of repeat offense, DED will take the necessary measures needed to enhance the credibility of such promotions,” added Shael.

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