ASA Non-broadcast Adjudication: Strike Lucky Games Ltd
Strike Lucky Games Ltd
20 Station Street
UK Incentives & Promotions
1 Saxon Road
8 June 2005
Cheshire, Derbyshire, Dorset, Suffolk, Surrey (x2), Tyne and Wear, West Sussex
Objections to a scratchcard and catalogue. The scratchcard stated "WIN A DREAM HOME or £250,000 3 matching symbols guarantees you one of the rewards overleaf ... HAVE U WON? £250,000 Dream House OR Cash equivalent £10,000 Cash £5,200 groceries (£100 per week) £5,000 New Kitchen £2,000 Garden Makeover £1,000 Gift Vouchers £750 Shopping Spree £300 Trips to Venice £250 Cash". Recipients who revealed three matching symbols and received the £1,000 Gift Vouchers were sent a copy of the catalogue. The catalogue described many goods including health and beauty products; each product description featured a recommended retail price (RRP), which was crossed out, and a lower price that was captioned "you pay". Text by each product stated "As a Gift Certificate holder, you pay only a processing and delivery fee".
The complainants challenged whether:
1. the RRPs in the catalogue were genuine and
2. the "processing and delivery" fees had been inflated to cover the cost of the goods.
The Authority challenged whether:
3. the description "£1,000 Gift Vouchers" on the scratchcard was misleading;
4. the scratchcard distinguished clearly between prizes and gifts;
5. the advertisers could substantiate the efficacy of the health and beauty products in the catalogue and
6. some entries in the catalogue encouraged self-diagnosis and self-treatment of serious medical conditions.
CAP Code (Edition 11)
Strike Lucky Games (SLG) said UK Incentives & Promotions (UKIP) were a separate company; the two companies had no common shareholders or Directors. They said UKIP were established suppliers of gift items to SLG; they explained that UKIP were not exclusive suppliers to SLG and SLG were not exclusive clients of UKIP. SLG said all fulfilment was the responsibility of UKIP.
1. Complaint upheld
UKIP sent a copy of the latest edition of the catalogue; they pointed out that it referred to an "item price" and not a recommended retail price (RRP). They said they had amended the catalogue after consultation with Trading Standards. UKIP said the item prices had been recommended by their suppliers. They sent orders to show that five of the items in the catalogue had been sold at the higher prices. They asserted that all of the items in the catalogue had been sold at the higher prices for a period of 10 months. They said they could not send evidence to show that a sample of 10 items selected by the Authority had been sold at the higher prices because they had not received orders for all of those items.
The Authority noted the current edition of the catalogue stated "item price" and not "RRP". It noted that UKIP had sold five of the items at the higher prices, but was concerned that UKIP had not sent evidence to show that the RRPs or "item prices" in the catalogue for a wider sample of the items were genuine or that the goods in the catalogue had ever been sold at the stated prices. Although UKIP had sent evidence to show that five of the 104 items in the catalogue only had been sold at the RRP, the Authority considered that they had not shown that the majority of RRPs were genuine and concluded that the catalogue was misleading.
2. Complaint not upheld
UKIP said the catalogue was an offshoot of their premium incentives services; it was operated to facilitate the premium incentive programmes. They said they operated the catalogue to break even and not to make a profit. They sent a spreadsheet that showed how the processing and delivery fees were calculated. The spreadsheet showed that the processing and delivery fee for each item was made up of costs including VAT, importation fees, salary payments, licensing fees, order processing, insurance, postage and storage. They drew attention to the terms and conditions which stated the processing and delivery fees included "all costs incurred by us in administering the Gift Catalogue programme including processing, replacement and delivery and lost orders, packaging, licensing fees, marketing, customer services, delivery and all other overheads and administration costs"; they believed that made clear how the processing and delivery fees were calculated. They said the fees were genuine and had not been inflated to cover the cost of the goods in the catalogue.
The Authority noted the terms and conditions explained that the costs of administering the catalogue offers were spread across the product range. It acknowledged that the spreadsheet showed that the processing and delivery fee for each item was calculated from the costs involved in operating the catalogue and fulfilling orders. Because the advertisers had shown that the processing and delivery fees consisted of the costs involved in operating the catalogue programme, the Authority concluded the processing and delivery fees had not been inflated to cover the cost of the goods. It did not object on this point.
SLG said they produced the scratchcard with guidance from the CAP Copy Advice team and ICSTIS. They believed the text "£1,000 Gift Vouchers" and the footnote "£1000 worth of gift vouchers are redeemable only against UK World Gift Catalogue, postage & packing charges apply" adequately explained the nature of the reward and the key conditions that applied to it. SLG said they had been given assurances by UKIP that the RRPs in the catalogue were genuine.
The Authority noted SLG and UKIP were separate companies. It acknowledged SLG had sought guidance from CAP and ICSTIS when preparing the scratchcard. The Authority also noted the footnote on the scratchcard made clear how the vouchers could be redeemed. It understood that the value of the vouchers was the difference between the RRP price in the catalogue and the processing and delivery fee. It acknowledged that SLG had been given assurances by UKIP that the RRPs in the catalogue were genuine. Because UKIP had not shown that the RRPs were genuine, the Authority concluded that SLG had not shown that the vouchers offered genuine savings on the advertised products. The Authority concluded that the description "£1,000 gift vouchers" was misleading and told the advertisers not to use the claim unless it could show that consumers could obtain genuine savings by using the vouchers.
SLG said they had followed CAP and ICSTIS guidance when referring to gifts and prizes. They pointed out that the front of the scratchcard said "WIN A DREAM HOME OR £250,000" and that text beneath the headline stated "3 MATCHING SYMBOLS GUARANTEES YOU ONE OF THE REWARDS OVERLEAF 2 matching symbols entitles you to a gift". They believed that the text clearly distinguished between the prizes of a house or £250,000 cash and the other rewards. They also drew attention to the text beneath the scratch panels that stated "You''re definitely entitled to two rewards (see over)". SLG said the text "HAVE U WON?" on the reverse of the scratchcard, immediately above the text "£250,000 Dream House OR Cash equivalent", made clear that only the house or cash sums were prizes. They said the text "If you have 3 matching symbols, then you''re guaranteed one of the above rewards" made clear that the other items listed were rewards or gifts and not prizes. They said they had received no complaints from consumers who were confused about which items were prizes and which were rewards or gifts. They said the listed items were offered across a range of scratchcards and mailings, and not to recipients of the specific scratchcard only. SLG asserted that significantly fewer than 50% of respondents across the range of creative variants of the promotion would receive any single item, and believed that, because no single item would be awarded to all or most respondents, they could legitimately describe all of the items as "prizes".
The Authority considered that the words "win", "rewards", "prizes" and the testimonials "''It''s the first time I''ve ever won money''" and "''It''s like winning the lottery!''" that appeared on the scratchcard were likely to confuse recipients about which items were gifts, and which were prizes. It noted the footnote stated "this promotion and the prizes indicated are shared between several different themed scratchcards & mailings". It understood from the prize distribution list for all creative variants of the promotion that significantly fewer than 50% of respondents to all creative variants of the promotion would receive the £1,000 gift voucher and significantly fewer than 50% of respondents to all creative variants of the promotion would receive the Venice trip; it noted the house or cash equivalent, £10,000 cash, £5,200 groceries, £5,000 new kitchen, £2,000 garden makeover, £750 shopping spree and £250 cash were available to a single respondent each. The Authority noted that the specific scratchcard received by the complainants offered seven of the prizes available to one lucky person each; all other respondents, i.e. over 99%, would receive either the £1,000 gift voucher or the trip to Venice, a substantially greater proportion for the specific scratchcard than the figures quoted for all the creative variants of the promotion. It considered that, because the vast majority of respondents to the specific scratchcard who qualified to claim an item would receive either the £1,000 gift voucher or the trip to Venice, while only seven lucky respondents could qualify to receive any of the other listed items, the £1,000 gift voucher and the trip to Venice should be described as "gifts" and the other seven items as "prizes". The Authority considered that, because the scratchcard did not make clear which items respondents who qualified to make a claim had a good chance of receiving and which items respondents who qualified to make a claim had very little chance of receiving, the scratchcard had not clearly distinguished between gifts and prizes. It concluded that the scratchcard was misleading. It told the advertisers to make clear in future which items were gifts and which were prizes, and to list the number of each prize available.
UKIP said they carefully vetted all the products that appeared in the catalogue and that they expected their suppliers to ensure the products complied with all relevant legislation and regulations, including any medical and scientific claims for those products. They said they did not believe the product descriptions offered treatment for conditions that required qualified medical help. The advertisers sent a list explaining how some of the products worked. They said they did not hold supporting evidence for some products and that some products had been withdrawn. They sent a copy of the latest edition of the catalogue that did not contain any health or beauty products.
The Authority was concerned that UKIP had not sent evidence to substantiate the efficacy claims of any of the products in the catalogue. It noted the new edition of the catalogue did not contain the products that the advertisers said had been withdrawn or discontinued. Because UKIP had not sent evidence to substantiate the efficacy claims for any of the products in the catalogue, the Authority concluded that the claims were misleading. It welcomed UKIP''s decision not to advertise those products in the most recent edition of the catalogue. It told UKIP to ensure they held evidence to substantiate any efficacy claims for health and beauty products before advertising them in future.
UKIP said none of the product descriptions encouraged self-diagnosis or self-treatment of serious medical conditions. They believed none of the product descriptions implied the products could cure serious medical conditions. They drew attention to the latest edition of the catalogue that did not contain any health and beauty products.
The Authority considered that some product descriptions, such as "Anti-wrinkle & rehydrating cream ... Great for eczema too" and "Body aches, sore muscles and arthritis pain can make life a misery, now you can help to relieve the pain with this handy massager", would encourage self-treatment of those serious medical conditions. The Authority noted the most recent edition of the catalogue did not contain health and beauty products. It advised them to seek guidance from the CAP Copy Advice team when preparing the next catalogue.