Can a salesperson promise me a cash reward if I give them my friends' contact details after I buy a new appliance?

The situation

I am writing to seek some clarity regarding a situation that happened last Tuesday at a large electronics retailer in Melbourne, Victoria. I went into the shop to purchase a high-end washing machine and a dryer, which cost me a total of $2,450. While I was finalising the payment, the sales assistant, a man named Greg, told me that if I signed the contract today, he would give me a $100 gift voucher as a thank-you. However, he specified that I would only actually receive this voucher once I provided him with the names and phone numbers of at least five of my neighbours or colleagues who might be interested in upgrading their appliances. He said this 'referral bonus' would be processed only after I had successfully helped him find these new customers. I felt a bit pressured to agree just to get the discount, so I handed over a list of names. I have since realised this feels a bit dodgy, as the benefit depends entirely on me doing more work after the sale is finished. I have already tried asking the store manager about the voucher, but he just brushed me off and said it was a private arrangement between me and Greg. Is it actually legal for them to use these kinds of promises to get me to commit to a purchase?

Detailed Analysis

Based on the facts you provided, Greg's actions appear to violate the laws regarding 'referral selling.' Referral selling is a practice where a person is induced to buy something based on a promise of a future benefit in exchange for helping find more customers.

According to the law, a person must not, in trade or commerce, "induce a consumer to acquire goods or services by representing that the consumer will, after the contract... is made, receive a rebate, commission or other benefit in return for: (a) giving the person the names of prospective customers"^[1]. This means Greg cannot use the promise of a $100 gift voucher to convince you to buy the $2,450 washing machine and dryer if that voucher is only given once you provide the names and numbers of five neighbours or colleagues.

The law specifically prohibits this because the reward is "contingent on an event occurring after that contract is made"^[1]. In your case, the 'event' is you providing the contact details after you have already signed the contract and paid for the appliances.

Furthermore, this is not just a private matter between you and Greg. The law states that a person "commits an offence if" they use these tactics to induce a sale^[2]. Because Greg was acting as a salesperson for the electronics retailer, the business itself could be held liable for his conduct. If the retailer is a large company (a body corporate), they could face massive fines for this type of conduct^[2].

It is unsettled whether the store manager's claim that this was a 'private arrangement' holds any weight, but the statute focuses on whether the conduct happened 'in trade or commerce,' which clearly applies to a retail sale in a shop.

Statutory Citations

Related Questions

• Can I get my money back for the installation service if the appliance I bought is faulty?
• Can I claim a refund for a faulty appliance if the person who originally bought it has passed away?
• Can I get a refund if my new internet provider didn't give me the mandatory service details?