Pay back the money: Tribunal orders Joburg company to refund customers for overcharging

A Gauteng hardware store found to have charged its customers excessive prices for surgical gloves during the State of National Disaster has been ordered to refund its customers for the overcharge, said the Competition Tribunal of South Africa.

Main Hardware, based in central Johannesburg, must also reduce its mark-up on surgical gloves to 10% during the remainder of the pandemic period and for six months thereafter.

“This arrangement forms part of a settlement between the Competition Commission and Main Hardware which has been confirmed as an order of the tribunal,” said the tribunal on Friday.

In terms of the agreement, Main Hardware will:

  • Immediately stop the excessive pricing conduct;
  • Reduce its net mark-up on surgical gloves and cap it at 10% to make the products affordable to customers;
  • Refund all its customers who bought boxes of surgical gloves for the higher price;
  • They must be refunded the amount of money exceeding a net margin of 10% per box;.

The Tribunal said where such customers cannot be traced; the refundable amount will be donated to the Solidarity Fund established by President Ramaphosa in response to the Covid-19 pandemic.

The commission launched an investigation into the hardware after receiving information that the business was allegedly charging excessive prices.

The commission found that Main Hardware ordered additional boxes of surgical gloves after the announcement of the state of national disaster.

It concluded that the increase in the mark-up for March 2020 was unreasonable and amounted to an abuse of dominance.

This is the second consent agreement relating to Covid-19 excessive pricing, to be confirmed by the tribunal.

On Monday, the tribunal ordered a Boksburg pharmacy in Gauteng to donate hand sanitizers, surgical gloves and face masks – valued at R25 410.00 – to two old aged homes in its area of business.

This, after the commission found it to be charging excessive prices for face masks.

In terms of the consent agreement, the pharmacy furthermore agreed to significantly reduce its mark-up on facial masks with immediate effect for the duration of the State of National Disaster.

The tribunal is an independent adjudicative body established in terms of section 26 of the Competition Act, No. 89 of 1998 (Act). It has jurisdiction throughout the republic.

Read: The checklist every South African business should see before heading back to work after lockdown

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Pay back the money: Tribunal orders Joburg company to refund customers for overcharging