There isn’t a more classic Valentine’s Day gift than a bunch of beautiful flowers, and online ordering has made it easier than ever to organise a floral surprise for your significant other.
But some big online retailers are using sneaky tactics to trick customers into believing they are supporting a local business – and the national competition regulator is now calling them out.
The Australian Competition & Consumer Commission (ACCC) is investigating reports of online retailers misleading customers into thinking they are local florists, or that their business has a local presence, when that is not the case.
Instead, the ACCC says these large businesses either create floral arrangements in distribution centres or outsource orders to local businesses after charging commissions.
Charles Lukasik, founder of the Australian Florist Network and owner of Sydney store Floral Expressions, has decades of experience as a florist.
But in the early days of his career, when he “didn’t know any better”, he worked with large companies to supplement income from his flower store.
The companies would gather online orders and distribute them to affiliated florists, but Mr Lukasik says profits after the companies take commission don’t compare to the profits florists can get by selling flowers by themselves.
Muscling in on local florists
Now that most florists have their own online presence through social media and websites, they don’t have to rely so much on online retailers, Mr Lukasik said.
That’s pushed the big companies into getting “tricky”, he added, including by taking advantage of their big budgets to flood search engines with their branding.
Emily Balke, manager of Brisbane-based Poppy Rose said people will try to search online for a florist in their local area, but the websites of these big online retailers will pop up first, often appearing as a local business.
Not only does this take away revenue from local small businesses, it can also mislead Australians trying to support their local community and leave them with nobody to hold accountable when something goes wrong.
Ms Balke has had “distraught” shoppers calling her store last-minute because the flowers they ordered from one of these retailers never arrived, and they couldn’t get in contact with them to complain.
“A lot of people do order from [online retailers] thinking that they’re ordering from a small business, and I think that’s the that’s the worst part of it,” she said.
Donna Fulton is the owner of Perth-based Verbena Flowers, and does some work with a couple of online retailers.
Ms Fulton said she makes an effort to use local produce and relies on her own local clientele for at least 80 per cent of her income – but business is business.
She said online retailers do make things more difficult for smaller florists, especially if they are pretending to be a local business.
ACCC investigates dodgy tactics
The ACCC is now cracking down on this type of misleading sales tactic.
ACCC deputy chair Delia Rickard said customers are often willing to pay high prices in exchange for getting fresh flowers, reliable delivery, and a direct point-of-contact.
“When national [online retailers] use suburb-specific information in their online digital marketing, it may mislead a consumer into thinking they are dealing with a small local business,” she said.
Ms Rickard also called out online retailers who don’t disclose to customers that a commission is being taken from their payment, as this can reduce the overall value of the customer’s order and undermine small businesses’ profit margins.
Mr Lukasik agreed that hidden commissions mean customers often aren’t aware they are spending more on an order than its worth.
He said a $300 Valentine’s Day arrangement bought from an online retailer could actually be only worth half that amount, with the retailer potentially taking a 50 per cent cut.
“It’s like you went to buy an 80-inch TV at Harvey Norman, but when they delivered it to you, it was a 20-inch TV,” he said.
“So you’re getting less bang for your buck.”
He said this amounts to stealing from customers.
Mr Balke said customers should research whether they’re buying from a local business before purchasing flowers.
“Make sure they’re an actual local florist – give them a call, or pop on their website or Instagram, and check them out,” she urged.