The Fair Trade Commission (FTC) yesterday decided to penalize — for the first time — an outlet for holding a “going-out-of-business” sale when it had no intention of closing down.
While going-out-of-business sales are a common occurrence in Taiwan, some stores hold them even though they are not closing down for good.
After a probe, the commission made a decision to penalize West Store (威斯特商行), an outlet selling clothing items and shoes in Taipei, for holding a going-out-of-business sale purely as a marketing strategy.
“West Store posted a sign on the exterior of the store that said it was ‘going out of business, all items NT$98 until June 4,’ giving the public the impression that it was going out of business on June 4,” the commission said in a press release. “However, on June 4, the poster outside the store was changed to ‘going out of business, all items NT$98 until June 14’ and ‘last 11 days.’”
“The store did not close down as it had previously declared and it was obviously using the ‘closing down sale’ as a marketing strategy to promote sales of its merchandise,” the statement said.
Store owner Huang Cheng-hsien (黃政憲) said that he originally intended to close the business before July 4 when the lease terminated, but later decided to renew the rental contract for three more months.
FTC members did not accept the explanation and the commission ruled that the store was in violation of Article 21 of the Fair Trade Act (公平交易法), which prohibits false advertising, and subjects violators to a fine of NT$50,000 (US$1,669).
The FTC also decided to fine two other businesses for inaccurate advertising.
The other two cases involved Bei-tzeng Enterprise Co (北增企業), which sells computer-related accessories, which claimed that it was founded in 1992 when it was actually founded in 2002, and Hsu-hsiang Metal Co (旭祥金屬), which said that it was founded in 1976, but was actually founded in 1981, the statement said.
The two businesses were also fined NT$50,000, the FTC said.