The man behind Auckland’s disastrous cash drop event told investigators marketing material promising a “$100k live Cash Giveaway” was designed to “entice people” to the promotional stunt.
But there had been no intention to drop $100,000 in real money and he believed there was “little reason” for anyone to believe that much legal tender would be given away to attendees.
The Commerce Commission issued a formal warning last month to Greenback Ecommerce Ltd, trading as The Safety Warehouse (TSW), which organised the event in December at Aotea Square.
Though organisers promised $100,000 would fall from the sky, the inquiry revealed that just $3600 in real money was given out.
The event turned ugly when the 1600 attendees realised most of the notes were fake money which could only be used as discount vouchers for the company’s online safety products.
Police handled initial complaints about the event before transferring the matter to the Commerce Commission for review.
The Commission found the company had engaged in conduct that was likely to have breached the Fair Trading Act but stopped short of a prosecution.
A Commerce Commission “termination report”, obtained by the Herald under the Official Information Act, reveals new details about the incident.
Greenback Ecommerce Ltd is owned by Andrew Thorn, who was interviewed by investigators as part of the inquiry.
The Herald requested transcripts of Thorn’s interview but this was declined on privacy grounds and “to protect information subject to an obligation of confidence”.
However, the report provides a summary of Thorn’s interview.
He told investigators the $100,000 referenced in advertising related to the combined value of products, vouchers and cash to be given away at the event.
“The marketing material clearly referenced ‘in value’ and the public should have realised that this meant there would not be $100,000 in cash given away,” Thorn told investigators, according to the report.
“In Mr Thorn’s view, there was very little reason for anyone to believe $100,000 in cash would be given away.”
Thorn acknowledged that not all marketing material for the event specified “in value”.
“If that’s a discrepancy that’s hugely unfortunate,” he told investigators, adding that the marketing was “to entice people to the event, who should have noted the reference to ‘in value’ in the event description on the ticketing website”.
“Mr Thorn was of the view that there was sufficient information for event attendees to make a fully informed decision as to whether or not to attend the event.”
He also claimed the vouchers which were ultimately given out had an equivalent total monetary value of nearly $3 million.
The vouchers claimed to provide discounts for products from The Safety Warehouse’s website, and for goods and services from three other companies of which Thorn was the sole director.
“We understand that the vouchers for the other three companies could not be initially redeemed by consumers using the information provided on the voucher due to website issues.”
Thorn characterised the cash drop as a “charity event”, telling investigators the purpose was to “give back, be a good company”.
At the time of the investigation, The Safety Warehouse described itself as an “online mega store” selling personal protective equipment and workwear.
“TSW now appears to have largely removed its online presence and may be trading using a different name.”
The investigation report said The Safety Warehouse’s business appeared to have beennegatively affected by the PR stunt.
A call to Thorn yesterday was disconnected. He asked for written questions to be sent but did not respond. He is yet to apologise.
The event was free but participants were required to register for free tickets to ensure the event met Auckland Council requirements, the report said.
Commerce Commission investigators met with council representatives as part of the investigation “to discuss planning around the event”.
Auckland Unlimited director arts, events and entertainment, Robbie Macrae, told the Herald a venue hire agreement was signed with organisers “with specific clauses added to minimise risk and ensure the safety of patrons”.
He confirmed Auckland Live was aware of the nature of the cash drop event.
Asked if an event of this type should be approved by a council organisation, Macrae said: “All events are individually assessed.”
The event turned violent when attendees discovered most of the notes were fake $5 bills and realised they had been duped.
In December, Thorn said some of his staff were bruised and one man who was in the back seat of a car was taken to hospital after an object thrown through the back window scattered glass into his eyes.
Many of the attendees had travelled from out of town in the hope of pocketing some pre-Christmas money.
Prime Minister Jacinda Ardern called on organisers to apologise, saying she could not “fathom how someone would think that was a good idea”.
“It’s caused harm, it’s caused hurt, they should apologise,” Ardern said in December.
It was also revealed fake money from the controversial promotional had been used to dupe a bar into providing free drinks in Hamilton.
A Reserve Bank spokesperson said at the time publishing a genuine banknote or coin which could be mistaken for the real thing may breach the law, and anyone presenting a counterfeit note is committing an offence.
In the aftermath of the event, Thorn told media the cash drop had been “unfairly characterised” as an event with fake money.
He maintained that the company stood by its marketing, insisting “real funds” were given away alongside the fake money vouchers.
Thorn said the company had “no intent to deprive, mislead or embarrass” anyone.
“It was $100,000 in real money, and the fake money discounts on top – I think that was $40,000 [fake money] notes that were printed,” he said at the time.
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