A work gear company has been warned after a Commerce Commission investigation revealed a much-maligned $100,000 'cash drop' event it held in central Auckland last year only involved about $3600 in real money.
'The Drop' event in Aotea Square - held by Greenback Ecommerce, trading as The Safety Warehouse - was attended by about 1600 people on December 5, 2020 after advertising promised $100,000 in cash would be dropped from the sky.
But it drew widespread derision after some attendees were injured and others discovered what they thought were banknotes were actually vouchers.
Following a months-long investigation, the Commerce Commission has warned The Safety Warehouse for "engaging in conduct that it considers was liable to mislead and likely to have breached the Fair Trading Act".
It said the company's promotion of the event on social media platforms and its website created the impression that $100,000 in cash would be given away at the event, when in fact only a total of $3600 of money was given away.
Most of what was dropped was vouchers in the form of lookalike $5 notes, the Commerce Commission says.
The agency, responsible for enforcing New Zealand's fair trading laws, says it spoke to many attendees who were "disappointed" to learn that they hadn't caught real money when they believed that's what was being given away.
Commerce Commission Chair Anna Rawlings says businesses have a responsibility to be upfront and clear about what they're offering.
"They must not tell half-truths or provide information that is liable to mislead consumers," she said.
"They should think carefully about how consumers will interpret the claims they make and what consumers will likely understand about them - even when it is done as part of a one-off publicity event which is free to attend."
The Safety Warehouse has given the Commission assurances it has no plans to run an event of this type in the future.
The Commission's warning to the company indicates it's likely to have breached the law, but only the courts can decide whether a breach has actually occurred.
Police last year said it had investigated the event and found no evidence of criminal offending.
But Prime Minister Jacinda Ardern publicly called on the company to say sorry.
"I cannot fathom how at any point someone can think that's a good idea. Clearly it was not and it's caused harm, it's caused hurt. They should apologise," she said.
The Safety Warehouse was fined last year for a separate incident in which they sent commercial text messages that "took advantage of the second COVID-19 outbreak", the Department of Internal Affairs (DIA) said.
It was issued a penalty of $30,000 for breaching the Unsolicited Electronic Messages Act 2007.
