China’s Lashou.com Accused of Price Fraud

According to Chinese newspapers, Lashou.com, one of that country’s leading group buying sites, has been accused of falsifying the original prices on the products and services it sells. Apparently it is not an uncommon practice in China for such websites to create inflated original prices so when they offer a discount of 80 to 90 percent, the “deal” ends up being close to the original full prices meaning there is little, if any, deal.

China’s group buying websites have no industry regulations on pricing but it is against the law to provide false information on the original price of goods or services and a business can receive stiff fines or lose its license.

This is not a practice that is limited to China. Here in the states Groupon offered a deal for Valentine’s Day from FTD offering $40 worth of flowers for $20. It sounded good until consumers learned the prices they were paying for the flowers were actually as much as $20 higher than on the retailer’s web site. It was thought by many that FTD had hiked the price to make up for the loss they knew they’d be taking from the discount and Groupon’s 50 percent take on the deal. In this case it wasn’t the deals provider but the retailer that manipulated the pricing.

Source: Global Times