Ad description
Two national and one regional press ads promoted John Lewis.
a. One national press ad published in February 2011 was headed "Discover our range of Apple computers, all with a free 2-year guarantee". Text stated "About our Service: All our computers come with a free 2-year guarantee. All our shops are Never Knowingly Undersold, so we won't be beaten on quality, price or service ... ".
b. The regional press ad published in December 2010 promoted a vacuum cleaner, washing-machine, fridge freezer and coffee machine. Text stated "... Because we are Never Knowingly Undersold you can be sure you're getting great value. We regularly check and match the online and high street prices of our competitors, even during sales. And if you find the same item for less, in any high street competitor's shop or on their website, we'll refund the difference*". The asterisk was linked to a footnote that stated "* Our commitment to service means we do not match competitor prices which are only available online or in catalogues, see our Never Knowingly Undersold leaflet in-store for more details ".
c. The second national press ad published in December 2010 promoted a Sony TV and free Blu-ray player. Text stated "... Blu-ray player ... FREE 2-year guarantee Extend to 3 years £59 ... All our TV's come with a free 5-year guarantee. All our shops are never Knowingly Undersold so we won't be beaten on quality, price or service*". The asterisk was linked to the same footnote as in ad (b).
Issue
DSG Retail Ltd challenged whether:
1. the claims "free 2-year guarantee" in ad (a) and "free 5-year guarantee" in ad (c) were misleading, because they believed the guarantees had always been included in the price and therefore could not be described as "free";
2. the price promise "Never Knowingly Undersold" in ads (a), (b) and (c) was misleading, because they believed the advertiser would not price match products that did not have the same length of guarantee.
Response
1. John Lewis Partnership plc (John Lewis) said their guarantees were very clearly an additional, separate service benefit to the customer. They said they did not charge for their guarantees and their prices were not increased to take account of any cost of the guarantee to them. They said they had no internal price or value that they placed on their guarantees and the only way they accounted financially for their commitment to guarantees was by making an overall provision for the likely cost of repair or replacement arising from customer claims. They attached examples of "free" used to describe additional services from free delivery or free recycling and said the claim "free" was well understood by consumers.
2. John Lewis said the claim "Never Knowingly Undersold" meant that they proactively matched the "box price" of their competitors' products, despite the fact that they also offered free guarantees. They attached examples of price comparisons from April 2011 in which the cost at John Lewis was the same as, or cheaper than that of their competitors regardless of the length of guarantee. They said that if a customer found a cheaper price at one of their competitors, their shop staff were instructed to match the box price of that product. They said that following customer feedback, they had recently re-clarified this instruction with their shop staff and that all of the relevant leaflet and website materials were also being updated.
Assessment
1. Upheld
The ASA noted that the CAP Code stated that marketers must not describe an element of a package as "free" if that element was included in the package price unless consumers were likely to regard it as an additional benefit because it had recently been added to the package without increasing its price. To demonstrate that the "free" guarantees had recently been added to the products promoted in ads (a) and (c) without increasing their price, John Lewis would therefore need to show that those products had been on sale at the same price but without a guarantee, or with a less favourable, significantly shorter guarantee before the longer "free" guarantees had been added.
We acknowledged that the guarantees offered by John Lewis were longer than those offered by their competitors, and that their competitors generally charged for guarantees over 12 months, whereas John Lewis did not. However, because they did not show that the products featured in the ads had been on sale at the same price but without the two- and five-year guarantees, we concluded the claims "free 2-year guarantee" in ad (a) and "free 5-year guarantee" in ad (c) were misleading.
On this point ads (a) and (c) breached CAP Code (Edition 12) rules
3.1
3.1
Marketing communications must not materially mislead or be likely to do so.
and
3.3
3.3
Marketing communications must not mislead the consumer by omitting material information. They must not mislead by hiding material information or presenting it in an unclear, unintelligible, ambiguous or untimely manner.
Material information is information that the consumer needs to make informed decisions in relation to a product. Whether the omission or presentation of material information is likely to mislead the consumer depends on the context, the medium and, if the medium of the marketing communication is constrained by time or space, the measures that the marketer takes to make that information available to the consumer by other means.
(Misleading advertising) and
3.25
3.25
Marketers must not describe an element of a package as "free" if that element is included in the package price unless consumers are likely to regard it as an additional benefit because it has recently been added to the package without increasing its price.
(Use of free).
2. Upheld
We noted the claim "Never Knowingly Undersold" meant John Lewis proactively matched the "box price" of their competitors' products and noted this policy had been put in place by John Lewis following customer feedback and that they now matched the price of items regardless of the difference in the length of guarantee.
However, we noted that at the time at which the ad appeared, their website and the leaflets explained that they would expect their competitors to provide a comparable length of guarantee before they matched their price. If a competitor charged extra for the same length of guarantee included in the John Lewis price, they would include the additional cost of that guarantee before then matching that price.
We considered it acceptable in principle to exclude products from the price match policy that did not have the same length of guarantee, provided that the information was presented to the consumer prominently in the marketing communication. However, because the ads that were the subject of this investigation did not make clear the exact items on which the price match was offered, they were therefore likely to mislead consumers as to whether or not the product they purchased was covered by the price match guarantee. We therefore concluded that the ads were misleading.
On this point ads (a), (b) and (c) breached CAP Code (Edition 12) rules
3.1
3.1
Marketing communications must not materially mislead or be likely to do so.
and
3.3
3.3
Marketing communications must not mislead the consumer by omitting material information. They must not mislead by hiding material information or presenting it in an unclear, unintelligible, ambiguous or untimely manner.
Material information is information that the consumer needs to make informed decisions in relation to a product. Whether the omission or presentation of material information is likely to mislead the consumer depends on the context, the medium and, if the medium of the marketing communication is constrained by time or space, the measures that the marketer takes to make that information available to the consumer by other means.
(Misleading advertising),
3.7
3.7
Before distributing or submitting a marketing communication for publication, marketers must hold documentary evidence to prove claims that consumers are likely to regard as objective and that are capable of objective substantiation. The ASA may regard claims as misleading in the absence of adequate substantiation.
(Substantiation) and
3.38
3.38
Marketing communications that include a comparison with an unidentifiable competitor must not mislead, or be likely to mislead, the consumer. The elements of the comparison must not be selected to give the marketer an unrepresentative advantage.
(Other comparisons).
Action
Ads (a), (b) and (c) must not appear again in their current form. We told John Lewis not to refer to guarantees as "free" unless they could show that the products had been on sale at the same price without the guarantee, or with a significantly shorter guarantee.
