ASA Adjudication on Virgin Wines Online Ltd

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Two leaflets for Virgin Wines:

a. the first leaflet, which was distributed with goods purchased from Amazon.co.uk, stated "As a thank you for your purchase, we would like you to have this £40 WineBank voucher Claim your £40 voucher NOW". The leaflet included an alphanumeric code and password. On the rear, text continued "£40 WineBank voucher How to claim your £40 WineBank voucher 1. Go to www.virginwines… or call 0870… 2. Enter your voucher code and password 3. And you have just saved £40! 4. You can now choose your own case, OR make your £40 go further with this month's hot deal". Text under the side heading "Exclusive Case Offer" stated "Use your £40 voucher to buy this case worth £100 and get an extra £20 off. You only pay £39.99 for £100 worth of wine - saving £60.01 Cheers!". Text in smaller print stated "Just as you expected, Terms & Conditions apply to this voucher, plus the usual ones listed at www.virginwines… If you're already a customer, you can't use it. You can only use it once - and not with any other offer. It's valid only if you buy at least a 12 bottle case costing £79.99 or more (excl. delivery) unless we say otherwise. You can't exchange it for money (sorry!) but using it gives you an account at our WineBank. For details and benefits visit …";

b. the second leaflet, which was distributed with goods from Lovefilm, stated “as a valued LOVEFILM member, we would like to reward you with this Virgin Wines voucher Virgin wines £40 WineBank voucher Code XXXX Password XXXX Go to www.virginwines… or call 0870…”. Text on the rear of the leaflet stated “£40 WineBank voucher How to claim your £40 WineBank voucher 1. Go to www.virginwines … or call … 2. Enter your voucher code and password 3. And you have just saved £40! 4. You can now choose your own case, OR see our Exclusive Case Offer Full terms and conditions are available at www.virginwines …”.

Issue

The ASA received two complaints.  One complainant challenged whether leaflet (a) was misleading, because it did not clarify that:

1.  it was necessary to become a member of the Virgin WineBank and make a monthly payment and

2.  the offer to "... pay £39.99 for £100 worth of wine ..." was available only to members of the Deluxe WineBank, otherwise the cost was £49.99.

The second complainant challenged whether leaflet (b) was misleading, because it did not clarify that:

3.  it was necessary to become a member of the Virgin WineBank and make a monthly payment;

4.  the offer did not extend to pre-mixed cases and

5.  it was necessary to buy a case of 12 bottles of wine with a minimum value of £79.99.

CAP Code (Edition 11)

Response

1.  Virgin Wines said it stated clearly both on the voucher and in their terms and conditions that there would be a monthly commitment following the use of one of the vouchers; this was also clarified on-line during the check-out process.  They explained that, if customers were not happy with the WineBank at any time having opened an account, they were able to cancel their agreement and receive a full refund of any credit deposited.  In addition, although Virgin Wines referred to a monthly commitment, they pointed out that, if a customer wanted to skip payment for a month, they could do so.  They said it was a very flexible scheme and customers were not obliged to deposit funds or place an order every month.

2.  Virgin Wines explained that an IT error had led customers to an incorrect area of the Virgin Wines website, where a different and more expensive case of wine than was featured on the voucher was offered.  They said, when they realised the error, they instructed all customer service staff to honour the price quoted on the customer's voucher.

3, 4 and 5.  Virgin Wines did not comment specifically on these points, but explained that this voucher was no longer in distribution.

Assessment

1.  Upheld

The ASA acknowledged that the leaflet stated "... Just as you expected, Terms & Conditions apply to this voucher ... using [the voucher] gives you an account at our WineBank ...".  We also noted the terms and conditions available to read online stated under the heading "How it works", "... We bill your credit card an agreed amount on the 1st of each month".

We considered that it was not clear from the statement "using it gives you an account at our WineBank" that customers were obliged to, not only open an account with Virgin Wines, but also deposit monthly funds into it direct from their credit card.  We acknowledged that, when customers went online to make a purchase, the terms and conditions clarified all this information and we therefore understood that customers would be made aware of their commitment prior to making their purchase.  We considered however that, as a significant condition, the subscription-basis should have been made clear on the voucher itself.

We noted Virgin Wines' comments that it was possible to cancel a WineBank account or skip a monthly payment at any time without further obligation.  We concluded, however, that the information on the leaflet did not clarify fully the nature of the agreement behind the voucher's use and it was, therefore, likely to mislead.

On this point, leaflet (a) breached CAP Code clauses 7.1 (Truthfulness), 27.4 (Sales promotion rules) and 34.1a (Sales promotion rules - significant conditions for promotions).

2.  Not upheld

We noted Virgin Wine's explanation and appreciated that they tried to rectify the problem by honouring the voucher offer of £39.99 to customers who had expected to pay that price.  We considered, therefore, that they had taken reasonable steps to try to avoid causing disappointment.  We understood, however, that the complainant was offered the voucher price only if she also agreed to upgrade her account with Virgin Wines to a different type and were concerned that the voucher offer had not been honoured in her specific case.  Although we appreciated the complainant's frustration, we considered that only one complaint was likely to be an indicator that the same experience was not widely realised.

We concluded that the leaflet had not breached the Code in this respect.

On this point, we investigated leaflet (a) under CAP Code clauses 27.4 (Sales promotion rules) and 34.1a (Sales promotion rules - significant conditions for promotions) but did not find it in breach.

3, 4 and 5.  Upheld

We acknowledged that leaflet (b) stated that full terms and conditions were available to view on the Virgin Wines website.  We considered, however, that any significant conditions, likely to influence consumers' understanding of promotions, should be clarified on their marketing material.  We noted from the terms and conditions online that there were significant conditions attached to the redemption of the voucher, which included the user opening an account with the Virgin Wine Bank and making subsequent monthly payments of a pre-agreed amount.  We also noted a minimum spend threshold applied, in addition to the voucher value, of £39.99 and that the voucher could not be used in conjunction with any other offer (the complainant had been unable to purchase a pre-mixed case of his choice because it had already been discounted).  We understood that the complainant was disappointed because he was only made aware of those restrictions when he tried to redeem the voucher.  We considered that this information should have been made clear on the leaflet itself to avoid causing unnecessary disappointment.

On points 3, 4 and 5, leaflet (b) breached CAP Code clauses 27.4 (Sales promotion rules) and 34.1a (Sales promotion rules - significant conditions for promotions).

Action

The leaflets should not appear again in their current form.  We understood that leaflet (b) was no longer being distributed and we told Virgin Wines to ensure that leaflet (a) was amended to clarify all significant conditions attached to the redemption of the voucher.  We advised them to seek a view on future marketing material from the CAP Copy Advice team.

Adjudication of the ASA Council (Non-broadcast)