Online retailer Kogan.com wins ‘Shonky’ award from consumer group CHOICE for its $99 subscription

- November 3, 2023 2 MIN READ
Ruslan Kogan. supplied
Kogan.com founder and CEO Ruslan Kogan. Image: supplied
ASX-lister online retailer Kogan.com has put another feather in its cap, winning a “Shonky” award from consumer group CHOICE.

The annual Shonky Awards recognise products and companies that deliver a poor experience for shoppers.

Kogan was called out for “tricking customers” according to CHOICE, into signing up for its $99 ‘Kogan First trial.

Tech featured prominently in the 2023 Shonkies, including the rent-tech sector for “data gouging” people looking for a place to live, alongside personal alarms for being unreliable and hard to use and the Xbox minifridge, which uses as much power as a full-size fridge, but doesn’t keep things cool.

Supermarket giants Coles and Woolworths also received a Shonky award “for cashing in during a cost-of-living crisis”

It’s not Kogan’s first Shonky, with the retailer being named in 2019 for poor customer service.

This time, CHOICE CEO Alan Kirkland has accused Kogam.com of being deceptive. 

“Kogan is receiving a Shonky Award for using deceptive website design to trick people, pre-selecting the free shipping option for all customers, and sneakily signing them up for a Kogan First membership trial,” he said.

“If you were buying something online and the free shipping option was already selected, why would you choose another option? Unfortunately, if you miss the fine print when buying something through Kogan, you may find you’ve inadvertently signed up to a two-week trial of their ‘Kogan First’ program, and committed to pay $99 when the trial is up.”

Kirkland said CHOICE conducted a mystery shop of Kogan with 19 shoppers, with nearly a third – six – accidentally signing up for Kogan First, and none of them knew how much they had agreed to pay after the trial ended. 

It’s not the first time Kogan.com’s marketing tactics have drawn the ire of observers. In 2020,the company was fined $350,000 fine misleading ‘tax time savings’ ads in legal action brought by the consumer watchdog the ACCC.

But when it comes to the Shonky Awards, the Xbox Mini Fridge from Microsoft is a standout after failing to make drinks colder than a spring day.

“This ‘fridge’ took a lengthy 24 hours to bring eight drink cans to 21°C in our 32°C test chamber. For context, 21°C is warmer than tap water,” Kirklandn said. 

“To make matters worse, the Xbox fridge’s energy consumption is so high that it uses around the same amount of electricity as a regular full-sized fridge, without actually cooling anything. It also pooled an alarming amount of moisture in our testing.”

Meanwhile, CHOICE investigation found that 40% of renters have been pressured to use third-party rental platforms, such as 2Apply and Snug, to apply for a home. Kirkland said governments need to regulate these businesses to ensure that tenants are protected.

“These platforms require people to hand over unjustifiable amounts of personal data, putting them at risk of data breaches and information being used unfairly when screening rental applications,” he said

“Finding a home as a renter is already difficult enough, particularly when rents have risen dramatically and vacancy rates have plummeted to new lows. Third-party platforms should not be taking advantage of these circumstances to collect excessive data.”