Up to 50,000 Woolworths customers could receive up to $1,300 in compensation if the supermarket is found guilty of using fake discounts on essential grocery items.
The Australian Competition and Consumer Commission (ACCC) has taken the supermarket giant to court over allegations of misleading pricing tactics.
The consumer watchdog alleged that shoppers were incentivised to purchase popular products because they thought it would save them money.
The sales were allegedly artificially created when Woolworths raised the prices on hundreds of grocery items before dropping them back down at a later date.
Woolworths allegedly falsely or deceptively represented the prices of 266 products across its stores between September 2021 and May 2023, the ACCC claimed.
The supermarket chain allegedly increased prices on selected items by at least 15 per cent for six months before slashing the price to its original cost and adding the 'Prices Down' tags to trick customers.
It comes after the watchdog accused Coles of similar tactics with its 'Down Down' promotional stickers.
Two separate class action lawsuits seeking to reimburse shoppers are now underway against the supermarket giants.
The Australian Competition and Consumer Commission has accused Woolworths of using fake discounts to lure customers
The watchdog alleged that hundreds of everyday savings discounts were artificially created
Special Counsel at GMP Law, Gregory Mackey, is leading one of the class actions which involves more than 50,000 Woolworths customers.
He said that if one supermarket is found liable, then the other most likely will be as well.
'It has been agreed that, if the court finds in favour of the ACCC, that finding of liability will also determine the question of Woolworths’ liability in the class-action claim which seeks damages against Woolworths for engaging in the same alleged misleading and deceptive conduct,' he told Yahoo News.
If either of the lawsuits is successful, the next step would be a damage assessment to determine how much impacted customers are owed.
The refund could range anywhere between $200 and $1,300 per customer, depending on their spending habits, according to GMP Law.
The court case is expected to run for two weeks in Sydney's Federal Court.
Woolworths could face immediate fines if the ACCC wins the case.
Corrective and other orders could also be imposed.
Up to 50,000 Woolworths customers could be eligible for a refund of up to $1,300
The ACCC has accused Coles of similar practices with its 'Down Down' promotional discounts
Any liability judgment against Coles is yet to be determined.
However, an ACCC win will not lead to automatic refunds for impacted customers.
Mr Mackey also warned that any findings of liability could take months.
'We have no doubt that Woolworths and Coles are treating the ACCC proceedings and the class action proceedings very seriously,' he said.
'The proceedings are meant to send a message to Woolworths and Coles about their pricing practices. It is up to the supermarkets to decide their course of action in the future.'
Daily Mail has reached out to Woolworths, Coles and the ACCC for comment.