ASA Adjudication on National Pen Ltd

Ad

A direct mailing offered free pens to new customers when placing an order. Text described the pens and stated “…yours for only 30p net!!” and “50 pens for £29.50 Plus 50 Pens FREE! That brings your net price all the way down to 30p”.

Issue

1. The complainant challenged whether the ad was misleading, because he had to pay an additional, compulsory charge of £17.47 for shipping and VAT, which made the cost per pen 76p, rather than 30p.

2. The ASA challenged whether the offer for "50 Pens FREE" could be described as free, because there was a charge for handling.

CAP Code (Edition 11)

Response

1.  National Pen Ltd stated that it was standard practice within their industry to not include any additional charges, such as set up charge, shipping charges or VAT, when calculating the unit price of a product.

2.  They provided the order form, which formed part of the original ad, and pointed out that it included the text "Please allow contribution to handling £2.95 plus postage and VAT."  They stated each customer was made aware of the handling charges applying to an order as well as additional postage cost (depending on the quantity ordered) + VAT.  They stated the postage charge in the UK was variable and depended on the product and the quantity customers ordered; these costs were available on their website.

Assessment

1. Upheld

The ASA noted the postage and shipping costs were available on the website, but considered they were significant conditions of the offer and should have been included in the ad.  We noted that the Code specified that consumers liability for costs should be made clear in all material featuring "free" offers and that the ad had not included the costs for shipping, but the customer had been charged for them.  We also noted that VAT was mentioned in the small print, but that it was not clear whether the VAT applied to the cost of the pens or the handling charge.  We concluded that, because the charge for shipping was not included and the VAT costs were ambiguous, the ad was likely to mislead.

On that point, the ad breached CAP Code clauses 3.1 (Substantiation), 7.1 (Truthfulness) and 32.5 (Free trials and free offers).

2. Upheld

We acknowledged the order form included the charge for handling, however, we noted that the Code stipulated that an offer should be described as free only if consumers paid no more than the true cost of freight or delivery, such as the current public rate of postage.  Because the customer had been charged for handling, it was misleading to describe the offer as "FREE".

On that point, the ad breached CAP Code clauses 3.1 (Substantiation), 7.1 (Truthfulness) and 32.5 (Free trials and free offers).

Action

The ad must not appear again in its current form.

Adjudication of the ASA Council (Non-broadcast)