Background

Summary of Council decision:

Two issues were investigated, one of which was Upheld and the other was Not upheld.

Ad description

Claims in a national press ad and on a website for a sofa and carpet retailer:

a. The press ad stated "FREE CARPET WITH EVERY SOFA† ... £399 or over".

b. Website www.scs.co.uk stated "FREE CARPET WITH ANY SOFA ... £399 OR OVER". The "Carpets" page featured pictures of the carpets for sale with "was" and "now" prices.

Issue

Carpetright PLC challenged whether:

1. the claims "FREE CARPET WITH EVERY SOFA" in ad (a) and "FREE CARPET WITH ANY SOFA!" in ad (b) were misleading and could be substantiated; and

2. the "was" prices for the carpets in ad (b) were misleading and could be substantiated.

Response

1. A Share & Sons Ltd trading as ScS said they offered their products at the same price, regardless of whether it was sold online or in store. Additionally, during any calendar year, they ensured that no product was sold at a discounted price for longer than when it was sold at its normal selling price. They also offered 'single priced' products, which were sold at the same price throughout the year.

ScS said they had not increased the price of the sofas to cover the cost of supplying the "free" carpet. They provided price breakdowns for eight sofas that had been selected by the ASA and which appeared across both ads. They acknowledged that the sofas had been available previously at cheaper promotional prices; however, all of the selected sofas had been sold at the price featured in the ads immediately before the promotion began. They provided details about how long the sofas had been on sale at the immediate previous selling price; how long they had been on sale for the promotional price; and how they had established the advertised price. They also provided evidence about when they ran 'free carpet' promotions in the nine-month period preceding the promotion.

2. ScS said the price of their carpet always excluded underlay and that they adopted the same pricing policy to that of their sofas. They provided price breakdowns for three carpets which the ASA had selected. It showed the immediate previous selling price of the carpet; how the ”was” price had been established; and the carpet's price during their promotional "free" underlay' offer. ScS believed they had used the correct ”was” price as the basis of their price comparison.

Assessment

1. Upheld

The ASA noted Carpet Right's concerns and that the Code did not permit advertisers to describe an item as "free" in a promotional offer, when the cost of responding to the offer had been increased. We considered consumers were likely to expect that the price shown in the ad was the sofa's established price before the offer was introduced.

We identified eight sofas that were included in the promotion and which had appeared across both ads: Chloe, Storm, Dannii, Diamond, Coniston, Ashley, Lotti, and Candy. We received evidence of the price breakdown for each sofa over the preceding nine months before the promotion began. When determining the established price of each sofa, we took into account the price breakdown information provided by ScS, which covered the period from 1 January to 11 September − the day before the promotion began. That information stated the prices at which the sofas had been sold and for how long they had been sold at those prices during the nine-month period leading up to the start of the promotion. We considered that was a reasonable period over which to assess the fluctuations in price of the identified sofas and to help determine the established price of each identified sofa.

The Dannii sofa had been sold at the advertised prices of £399 for 189 days, and had been sold at two different lower prices for a total of 35 days in the preceding nine-month period. Because it had been on sale for a large majority of the period at £399, we considered that was its established price. The Diamond sofa had been sold at the advertised price of £685 for 136 days, and we noted it had been sold at two other prices (one higher and one lower) for a total of 87 days in that same period. We noted it had been on sale for most of the period at £695 and therefore, we considered that was the established price. The price of the sofas had not increased when the promotion began and therefore, we considered the carpet could be called "free" when bought with those particular sofas.

Both the Coniston and Ashley sofas had been sold only at the advertised price for 33 consecutive days immediately before the promotion began. Because we noted they had not been sold at any other price, we considered the advertised prices of £999 and £1,149 were the respective established prices. There had been no change from the established price to the advertised price at the start of the promotion and therefore, we considered the carpet could be called "free" when bought with those two sofas.

We understood the Lotti sofa had been sold only at a higher price for the 64 days immediately before the start of the promotion. Consequently, we considered that was its established price. We noted the price of sofa had decreased when offered with a carpet and because there was no increase in the Lotti's price, we considered the carpet was "free" when bought with that sofa.

The Candy sofa had been on sale at two different prices before the start of the promotion. It was sold at a higher price of £1,599 for 37 days and again for 11 days before the promotion started. It was also sold at the lower price of £799, which was the advertised price in the promotion, for 11 days. We noted the sofa had been sold for a total of 48 days at the higher price in the three-month period leading up to the promotion. Because it had been sold for longer at the higher price of £1,599 than it had been at the lower price, we considered £1,599 was its established price. The sofa was advertised at £799 and with a "free" carpet. Because no price increase had been applied when the sofa was offered with a carpet, we considered the carpet could be called "free" when bought what that sofa.

The Chloe sofa was advertised at £999; a price at which it had sold for 35 consecutive days between March and April, and again for nine consecutive days in May. It had sold for the remainder of the nine-month period at either £889 or £899; it was sold for £899 once for 112 days and again at that price for 16 days before that. It was also sold once at £889 for 20 days and again for 30 days within the nine-month period. Because the sofa had been sold at £899 for considerably longer than it had been on sale at £999, we considered that £899 was its established price. The sofa was advertised at £999 with a "free" carpet and because the price had increased from the established selling price, we considered the carpet could not be called "free".

The Storm sofa was advertised at £995; however, during that nine-month period, it had been advertised for £985 on two occasions, once for 19 days and once for 189 days. Given that the sofa had been on sale for £985 for longer than it had been on sale at £995, we considered the lower price of £985 was its established price. The advertised price for the sofa with a "free" carpet was £995 and because the established price had increased, we considered the carpet could not be called "free" when bought with that particular sofa.

We considered the promotion was a conditional purchase offer whereby consumers had to buy a qualifying sofa to receive the "free" carpet. The Code prohibited advertisers from calling an item "free" if the cost to respond to the offer, which included the price of the product consumers must buy to take advantage of the offer, had been increased. Therefore, we considered the carpet could not be called "free" if the sofa's price had gone up.

As noted above, the price had increased for two sofas which we considered to be an increase to the cost incurred by the consumer to take up the offer. While we acknowledged that the difference in price may not necessarily have recouped all of ScS's expenses in supplying the "free" carpet, we considered, nevertheless, that an increase of any amount was not permitted by the Code when calling an item "free". Consequently, we considered the carpet was not "free" when bought with any qualifying sofa over £399, as was claimed. Therefore, we concluded the ads breached the Code.

On this point, ads (a) and (b) breached CAP Code (Edition 12) rules  3.1 3.1 Marketing communications must not materially mislead or be likely to do so.  (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  3.24.2 3.24.2 the cost of response, including the price of a product that the consumer must buy to take advantage of the offer, has been increased, except where the increase results from factors that are unrelated to the cost of the promotion, or  (Free).

2. Not Upheld

Carpet Right believed the “was” price quoted in the ad was not a genuine price for the carpet. They understood it was based on the retail price of the carpet during a promotional offer in which the carpet was sold with "free" underlay. Therefore, they believed the price comparison was likely to mislead consumers.

We identified three carpets which appeared in ad (b): the Royal Sovereign, Fashion House and Landmark. We received a price breakdown for each for a six-month period, 24 February to 11 September 2014. We noted the price for the three carpets changed three times and that they had been included in the "free" underlay' offer for ten consecutive days. During the six-month period, the carpets were sold at the advertised ”was” price on two occasions: for 45 consecutive days and for a further 101 consecutive days immediately before the "’free’ carpet with every sofa” promotion began. They had been on sale at a lower price for 61 consecutive days in between.

We noted the carpets had been on sale at the ”was”' price for over three months leading up to the start of the promotion, and for over a month prior to that. Given the pricing history of those carpets over the six months leading up to the promotion, we considered the “was” price was the normal selling price for the carpets. Therefore, we concluded ScS had used the correct reference price when making their “was” and “now” price claims and consequently, the ad did not breach the Code.

On this point, we investigated ad (b) under (Edition 12)  3.1 3.1 Marketing communications must not materially mislead or be likely to do so.  (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  3.17 3.17 Price statements must not mislead by omission, undue emphasis or distortion. They must relate to the product featured in the marketing communication.  (Prices), but did not find it in breach.

Action

Ads (a) and (b) must not appear again in their current form. We told A Share & Sons Ltd not to use the claim "free carpet on any sofa over £399", if that was not the case.

CAP Code (Edition 12)

3.1     3.17     3.24.2     3.7    


More on