Business ProfileforZenshopworld

On April 30 2019 BBB contacted the company regarding the pricing schemes of several business websites. Many of the websites displayed their products at a significant price reduction, with no sale end date, or increase to regular price.

The Competition Act, regulated by the Competition Bureau states the following regarding false or misleading ordinary selling price representations:

Subsections 74.01(2) and 74.01(3) of the Competition Act are civil provisions. They prohibit the making, or the permitting of the making, of any materially false or misleading representation, to the public, as to the ordinary selling price of a product, in any form whatever. The ordinary selling price is determined by using one of two tests: either a substantial volume of the product was sold at that price or a higher price, within a reasonable period of time (volume test); or the product was offered for sale, in good faith, for a substantial period of time at that price or a higher price (time test).

In the event that the represented ordinary price refers to the ordinary price of suppliers in the market, unless these suppliers have sold a substantial volume of the product at the represented ordinary price, or alternatively, these suppliers have offered the product for sale in good faith at the represented ordinary price, this price can not be referenced as the ordinary price, and an issue is raised under subsection 74.01(2).

In the event that the represented ordinary price refers to the supplier's ordinary price, unless the supplier has sold a substantial volume of the products at the represented ordinary price, or alternatively, the supplier has offered the product for sale in good faith at the represented ordinary price, this price can not be referenced as the ordinary price, and an issue is raised under subsection 74.01(3).

Under these provisions, it is not necessary to demonstrate that any person was deceived or misled; that any member of the public to whom the representation was made was within Canada; or that the representation was made in a place to which the public had access. Subsection 74.03(5) directs that the general impression conveyed by a representation, as well as its literal meaning, be taken into account when determining whether or not the representation is false or misleading in a material respect.

The company provided the following response on April 30 "These are the suggested retail price sold by competitors and suggested retail price advised by suppliers. These in no way to mislead anyone. All items are sold at a discount price and lower than competitors cost. the tibestan knots full set are sold at 44.99 and are suggested to be at 99.99 and sold for that at competetors stores. The note says 17.99 was 99.99 but the full set is 44.99 and is sold for half off Suggested retail price 99.99 and they are sold for higher on other sites. Every store on planet earth has stuff at a discount."

Zenshop did not modify their advertisements to be in compliance with the Competition Bureau of Canada's advertising requirements, or the BBB Code of Advertising.