Dell walloped with $6.5 million fine for fake monitor discounts

Dell’s Australian arm has been hit with an AUD $10 million ($6.5 million) fine for fake monitor discount prices.

The Australian Competition & Consumer Commission (via Ars Technica) says that Dell is guilty of “making false and misleading representations on its website about discount prices for add-on computer monitors.”

Arguably, what isn’t surprising is Dell’s advertised discounts not being quite what they seem but the company actually being held to account. Anyway, the specific ruse here involves advertised prices placed next to a higher price with a strikethrough line. That implies the advertised price is lower than the monitor’s usual cost.

But the strikethrough prices weren’t actually representative of the typical cost. If fact, the whole thing was so out of whack the actual offer price was sometimes higher than what Dell Australia typically charged for a given monitor, making the strikethrough price even higher than that.

“In some cases, consumers paid more for the add-on monitor advertised as ‘discounted’ than they would have paid if they had bought it as a stand-alone product, which is shocking,” ACCC commissioner Liza Carver said. Overall, the ACCC reckons Dell customers spent an excess $2 million AUD (about $1.3 million) on Dell monitors from August 2019 to December 2021.

Dell has been ordered to provide full or partial refunds to customers. Dell also told Ars Technica today that it is paying interest on the overcharges to customers and “taking steps to improve our pricing processes to ensure this sort of error does not happen again.”

If that all sounds above board, well, one could argue that sharp pricing practices abound on Dell’s websites, that this is merely the tip of the iceberg.

“Estimated Value”? Yeah, right! (Image credit: Dell)

One of the more egregious Dell practices involves its “Estimated Value” ruse. If you peruse Dell’s gaming monitor pages right now,  you’ll find that most monitors have offer prices listed below a cheaper strikethrough price.

That strikethrough price is labelled “Estimated Value”. According to Dell’s legalese, that refers to “Dell’s estimate of product value based on industry data, including the prices at which third-party retailers have offered or valued the same or comparable products, in its most recent survey of major online and/or off-line retailers. Third-party retailer data may not be based on actual sales.”

In practice, that is pretty much unpoliceable. In a strict legal context, it would be very hard to prove, for instance, that the $799.99 Estimated Value of the Dell G3223Q 32-inch 4K Gaming Monitor is intentionally misleading, even though looking at its specs you could easily buy something comparable for $600. Because you could also easily buy something comparable for $800.

So, Dell runs a strikethrough price of $799.99 and offers it at $699.99, giving the impression of a $100 discount. Is that every bit as misleading as what it has been fined for in Australia? You could certainly make a case for that. But it’s been carefully designed to make it hard going on impossible to hold Dell to account. After all, there is no single best way to estimate the market “value” of any product.

Whatever, the obvious advice is to ignore the strikethroughs, they are never to be trusted. Do your own due diligence and your own price comparisons, or you could always let us do that for you, too. Never take Dell’s or any other manufacturer’s word for it.

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