You may have received a call from a company asking whether they can use your premises to host a one-off sale for bankrupted, liquidated or ex-catalogue goods. Although many companies will be genuine, there are rogue traders who are looking to use your premises in order to hold a one-day sale - commonly referred to as a 'mock auction'. This can create problems for consumers and could damage your reputation.
You should ensure you have a system when you deal with bookings for sales at your premises, including such actions as keeping written details of all bookings. If the booking is made by telephone take the number and call them back to ensure that they really exist. Ask questions about the nature of their booking to see what response you get, and politely refuse if you are suspicious (warning other potential venues).
It is also a good idea to tell traders you know about consumer law and reserve the right to attend yourself and notify trading standards, so that they can see that the trader doesn't break any rules.
In the guide
What can I do?
Typically, a room will be booked for a sale of household goods or similar. The sale will then be advertised in the local papers and/or by leaflets delivered to houses in the locality. These will typically feature a range of bargain-priced goods, offered for disposal at a 'sale of bankrupt stock' or 'massive liquidation sale', or some similarly described event.
The apparent bargains on offer often attract quite a large crowd but, in practice, the bargains rarely, if ever, materialise at the sale. For example, a 'massive disposal sale' featuring a range of brand name goods such as televisions or DVD players may actually turn out to be a sale of low value goods such as tool sets, glasses, blank DVDs and electrical goods, many of which may be reconditioned, seconds, or catalogue returns.
The goods will not be on open sale but will instead be offered for sale during the course of a very slick sales promotion, delivered from a podium to a crowd of expectant consumers, who are very often completely taken in by sales tactics that rely on crowd psychology to generate excitement. These tactics may include asking consumers to put up their hands if they want to buy certain goods or a bag of goods, or selecting certain consumers to the exclusion of the rest of the audience.
In a typical sale, the salesperson will begin by offering low-value goods at giveaway prices. They will then proceed to develop the sales atmosphere by apparently offering for sale more valuable items. These items may actually be purchased by people 'planted' in the audience by the organisers. A limited selection of brand-name electrical goods may be displayed on the sales rostrum, but they may never actually be sold. However, their presence ensures that audience interest is maintained. In some cases there may be a 'plant' in the audience who has been put there by the sales promoter. This person then appears to be getting some genuine bargains, which only adds to the excitement.
The aim is to reach a point where consumers are willing to hand over money to purchase the contents of sealed bin bags in the expectation that they contain quality goods. The consumers are told not to open the bags until they get outside, or at home, and it then turns out that they contain cheap, poor quality items. By this time, it is usually too late. When complaints are made, the organiser can be very unhelpful in dealing with them.
The sales practices described are likely to be 'banned practices' under the 'bait advertising' provisions (or 'bait and switch') of the Consumer Protection from Unfair Trading Regulations 2008. The promoter could face either prosecution or action under the Enterprise Act 2002 to prevent the practices. There could also be action against deceptive descriptions, pricing methods or fraud.
Typical complaints received allege:
Venues have complained that the nature of the sale has been misrepresented to them when they accepted the booking and in some cases that they have not received payment for the booking. At some sales, members of the venue staff have had to deal with very angry consumers who held them responsible for resolving their grievances with the sales promoter.
What can I do?
The obvious answer is to say no to any enquiries from sales organisers. However, if you are not sure whether the enquiry is from a genuine trader, ask some probing questions about the type of sale proposed when you receive the initial booking enquiry.
A booking form, including a code of conduct, has been prepared for venues to secure written agreement that the hirer will abide by certain terms and conditions. The form has been designed to prevent the conduct of a one-day sale of the type described above. You may also wish to refer to the terms and conditions provided on the form when the initial booking enquiry is received, to assist you in establishing the nature of the proposed sale. If you receive the right assurances from the enquirer, and decide to proceed with the booking, the hirer should be asked to sign the form.
The booking form is attached:
Some local authorities have a by-law in place that requires both the occupier of the premises where a sale is to take place and the person holding the sale to give written notification to that local authority if an occasional or one day sale is to take place. You are advised to check with your local authority to see if there is such a by-law before going ahead with any booking.
This leaflet is not an authoritative interpretation of the law and is intended only for guidance. Any legislation referred to, while still current, may have been amended from the form in which it was originally enacted. Please contact us for further information.
Enterprise Act 2002
Consumer Protection from Unfair Trading Regulations 2008
Last reviewed/updated: October 2013
© 2013 itsa Ltd on behalf of the Trading Standards Institute.