ASA Adjudication on Kaleidoscope Ltd

Ad

A direct marketing e-mail had the subject line “Hurry! Claim your free gift worth £75 now!” The e-mail showed the Kaleidoscope logo and featured tabs such as “fashion”, home & living”, “garden”, etc. The e-mail was headlined “Tis the season to be gorgeous”. The email contained a personal message to the recipient, which contained the text “Plus, right now we're giving away Elizabeth Arden gift sets free with every order - perfect for you or great as a gift." A second headline stated “Free Elizabeth Arden Gift Set with all orders!” Smaller text provided details of the gift set’s contents, which were also pictured. “Free gift” was shown in a circle. Additional products such as a range of dresses and shoes were also featured in the e-mail, which extended over several pages. At the very bottom, small print stated “All orders are subject to status and availability. See catalogue for full details and conditions …” and contact details were provided.

Issue

The complainant challenged:

1. the availability of the free Elizabeth Arden gift;

2. whether a substitute gift was available.

CAP Code (Edition 11)

Response

1. Freemans Grattan Holdings, trading as Kaleidoscope (Kaleidoscope), stated they had 471 Elizabeth Arden gift sets in stock, which was in line with their usual expected stock requirements.  They had estimated the stock numbers by considering the average number of responses to previous promotions and had thought 471 sets would cover the response rate to the ad.  They provided documentation from other similar promotions to support those statistics.  They stated that 761 orders were taken from the promotion, which was an unprecedented demand for that type of promotion.  

2. Kaleidoscope said that, as a general rule, an alternative item was available, if the free gift stock was exhausted, but in this case that was not stated in the terms and conditions.  They explained that due to the unexpected demand, they had not had time to source an alternative gift. They said any customers who had not received the gift and had contacted their customer services were offered a cash alternative to their account, which they could subtract from their order.  However, the cash alternative was not automatically offered to customers, because they were not aware of the insufficient stocks until all the orders had been processed.

Assessment

Not upheld

1. The ASA noted Kaleidoscope had based the expected demand on response rates to previous promotions on similar goods and that they had provided documentary evidence showing those rates and that they had ordered 471 gift sets based on previous rates for those similar promotions.  We acknowledged that the promotion had achieved a higher response rate than expected, but considered that they had used a reasonable method to estimate demand for the free gifts.  We therefore concluded that they had taken sufficient steps to ensure there was adequate availability for this promotion, but noted that, due to unforeseen demand, they had not been able to provide everyone with the gift set and should therefore have taken steps to provide a suitable alternative when it became apparent that they could not meet the demand.

We investigated the ad under CAP Code clauses 3.1 (Substantiation), 7.1 (Truthfulness), 16.4 (Availability of products), 27.4 (Sales promotions), 30.1, 30.3, 30.4 (Availability) and 32.5 (Free offers and free trials), but did not find it in breach.

2. Upheld.

We understood that Kaleidoscope been unable to supply demand for the free gift.  We noted that some customers who had not received the free gift set were not offered an alternative, although those customers who had not received the free gift set, but had contacted customer services, were offered a cash alternative to their account.  However, we considered that that did not relieve Kaleidoscope of the obligation to take all reasonable steps to avoid disappointment to all those customers who had taken part in the promotion and considered that Kaleidoscope should have automatically offered an alternative gift of equivalent value or the value in cash to all customers who had taken part in the promotion.

Because all customers were not automatically offered an alternative gift of equivalent value, we considered the advertisers had not taken adequate steps to avoid disappointing consumers and concluded the promotion was in breach of the Code.

On this point, the ad breached CAP Code clauses 3.1 (Substantiation), 7.1 (Truthfulness), 16.4 (Availability of products), 27.4 (Sales promotions), 30.1, 30.3, 30.4 (Availability) and 32.5 (Free offers and free trials).

Action

The ad must not appear again in its current form.  We told Kaleidoscope to take more care when planning similar offers in future and to ensure that they had enough stock to satisfy demand or make arrangements for an equivalent alternative.

Adjudication of the ASA Council (Non-broadcast)