Ad description

An email, from Choice Stationery Supplies, seen on 24 November 2015, included the claims “We’ll pay the VAT on all printer inks today …”, “Special Offer! VAT FREE PRINTER INKS”, “we’ll pay the equivalent of the VAT amount on … printer cartridges - that’s an equivalent saving of 20% today” and “… we’ll then deduct the equivalent of the VAT amount”. Smaller text below stated “Note: Items in the VAT sale are discounted by the VAT equivalent percentage …”.

Issue

The complainant, who understood the discount amounted to less than 20%, challenged whether the ad was misleading.

Response

Choice Stationery Supplies said they had received many orders during the offer and it was correct that the equivalent of the VAT amount was saved. In addition, the terms and conditions of the offer stated that the equivalent discount rate was 16.67%.

Assessment

Upheld

The ASA considered consumers were generally likely to be aware that the relevant rate of VAT was 20%. We also considered the ad, in particular given the claim “an equivalent saving of 20%”, was likely to be understood by consumers to mean they would make a saving of 20% on the prices of the products outside of the promotion (i.e. on the usual VAT-inclusive prices). However, we understood that was not the case because the prices available during the offer were equivalent to pre-VAT prices (rather than VAT-inclusive prices, minus 20%), which meant the discount available to consumers was instead 16.67% of the VAT-inclusive, non-promotional price. While we understood that was stated in the terms and conditions, we noted it was not made clear in the ad and in any case considered such qualification was unlikely to be sufficient to counteract the misleading impression given. Because the ad claimed a 20% discount was available, whereas the reduction available to consumers was less, we concluded that it was misleading.

The ad 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),  3.9 3.9 Marketing communications must state significant limitations and qualifications. Qualifications may clarify but must not contradict the claims that they qualify.  (Qualification) 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).

Action

The ad must not appear again in its current form. We told Choice Stationery Supplies Ltd in future ads not to make savings claims that misleadingly exaggerated the benefit available.

CAP Code (Edition 12)

3.1     3.17     3.3     3.9    


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