Note: This advice is given by the CAP Executive about non-broadcast advertising. It does not constitute legal advice. It does not bind CAP, CAP advisory panels or the Advertising Standards Authority.
In addition to the general rules on product availability in Section 3, rules 8.9 – 8.13 will apply to promotional offers.
These rules state that promoters must make a reasonable estimate of the likely response and be able to demonstrate they have done so. In addition, promoters must show they were capable of meeting that response or that consumers were given appropriate information regarding availability to decide whether participate.
Please note that pre 2015 examples will refer to rule 8.9 where it would now be rule 8.10.
- make a reasonable estimate of the likely response, and
- either show it could be met, or
- if demand cannot be met provide appropriate information.
- ensure timely communication in the event of an unexpectedly high response.
- not encourage a purchase as a precondition unless limits on availability is sufficient clear.
- not rely on “subject to availability”.
- be aware of the position regarding prizes.
Promoters must be able to demonstrate that they have made a reasonable estimate of the likely response (8.10). This means that, when marketing promotional items, for example, promoting a price reduction or offering free items, promoters must make a reasonable estimate of demand for those promotional items.
To effectively estimate the likely response, promoters should base estimates on past promotions that had a similar mechanic and had a promotional item of similar value or desirability. Generally, if a promotional item or savings are of a higher value than a previous promotion, it may not be suitable to make a direct comparison when estimating the response, because it is likely that the response rate will be higher. The ASA has upheld complaints against promoters that based response rates on past promotions offering products of a significantly different value or nature.
Advertisers should also consider whether there are other factors that could have an impact on the response, such as the timing of the promotion. Some products may be more popular in response to certain events (such as a major sport event), or at certain times (for example, at Christmas or Easter (ASDA Stores Ltd, 24 June 2015)). The ASA considered that Lidl had made a reasonable estimate of demand when running a promotion for prosecco, because they had acknowledged, among other things, that demand would likely be higher during the summer bank holiday weekend (Lidl UK GmbH, 04 April 2018). Complaints about a promotion offering free Legoland tickets with codes collected from The Sun were upheld because the advertiser had not made an estimate of the likely response, or considered the likelihood of a higher demand for the tickets during the school holidays (News Group Newspapers Ltd, 29 January 2020).
Demand at the point that a reward programme is ending is likely to be different than the demand during the life of the scheme (Unilever UK Ltd, 2 March 2016).
The level of publicity the promoter generates for the offer can also affect the likely response. If a promotion is heavily advertised, it is likely to receive a higher response that one that was not. The ASA upheld a complaint about an ad on the front page of the Daily Mail for a free jar of marmite, because the advertiser had not taken into consideration that there had been some publicity around the product on promotion (Associated Newspapers Ltd, 07 June 2017). The ASA is aware that unexpected positive publicity can have a significant increase in take up. In cases where a reasonable estimate has been made but demand increased because of an external, unplanned factor (such as unexpected inclusion in a TV programme or on social media) then the value of the estimate will not be negated. However, desirable promotions may well be shared on social media and promoters should consider this as a potential impact when estimating demand (and planning the promotion more generally).
Changes in the stores or methods of distribution may also have an impact. The ASA ruled against a promotion which ran in Superdrug stores offering a free hair towel with certain purchases. Superdrug based the estimate on a similar promotion which they had run the previous year, and had increased the number of free products ordered to account for a larger number of stores taking part. However, there was a 40% increase in the number of stores taking part, and the ASA considered that the increase in orders from 5,566 units to 7,000 units was not a reasonable increase relative to this (Superdrug Stores plc, 14 November 2018).
The ASA has ruled in favour of the promoter where it has been able to show that it made a reasonable estimate of demand and were capable of meeting it, including when an individual was unable to redeem the promotional item (Associated Newspapers Ltd, 11 November 2015).
If, having made a reasonable estimate of demand, promoters know they will not be able to meet it, they must clearly provide sufficient information about availability so that consumers can make an informed decision on whether to participate.
The ASA ruled against a hotel website because it continued to feature hotels which no longer had availability as part of the promotion (VUR Village Trading No 1 Ltd, 27 April 2016).
Appropriate information is likely to include any limitation on the availability of promotional items and the likely demand. Promoters should not actively market promotions where they know that the promotional items have run out, as this is likely to be considered misleading. Promoters should ensure that they act immediately to stop advertising the offer when stocks of the promotional item are gone. Media in which text can be changed immediately (for example, online) or that has short lead times (for example, the national press) are preferable to media that cannot be changed quickly or easily.
If the number of promotional items is particularly low compared to likely demand, promoters should consider whether it would be more appropriate to run a prize promotion, offering the promotional items as prizes to a minority of participants. See CAP’s Advertising Guidance on the marketing of promotions with prizes.
Code rule 8.11 states that if a promoter has made a reasonable estimate, and expects to meet the demand but cannot due to an unexpectedly high response, they must ensure timely communication with consumers and, in the case of detriment, offer a refund or reasonable substitute.
The ASA received multiple complaints about a cyber-Monday promotion offering consumers a free mobile phone handset when signing up to a contract because system issues caused by an unexpectedly high response meant that the promoter could not fulfil all orders. Whilst the promoter provided a press statement to this effect, this was released after the promotional period had ended, and the ASA had not been provided with evidence to show that customers had been notified during the period itself. Because the promoter did not ensure relevant timely communication with participants, the ad breached the Code (The Carphone Warehouse Ltd, 20 March 2019). See also Lidl UK GmbH, 04 April 2018.
Some promotions require consumers to make a purchase to be eligible for a promotional item, for example, by collecting vouchers in publications or product packaging. Code rule 8.12 states that promoters must not encourage consumers to make a purchase or series of purchases as a precondition to applying for promotional items if the number of those items is limited, unless the limitation is made sufficiently clear at each stage for them to accurately to assess whether participation is worthwhile.
Complaints about a promotion offering free Legoland tickets with codes collected in The Sun were upheld by the ASA. Tickets for dates over the school summer holidays had run out on the first day, however, readers were not informed that there was no longer availability over that period. Because they were not informed, readers did not have the opportunity to assess whether or not participation was worthwhile, and would have continued to purchase newspapers to collect codes without knowing that key dates were no longer available (News Group Newspapers Ltd, 29 January 2020).
Merely including a statement along the lines of “subject to availability” is not enough to relieve promoters of their obligations to avoid disappointing participants (Rule 8.9) as the rulings referred to above often show.
A promotion was considered in breach of the Code because the prize was not awarded. Although the terms and conditions in the ad stated “In the event that a prize cannot be supplied, no liability will attach to France Media Group”, the ASA considered that the Code made clear that phrases such as “subject to availability” did not relieve promoters of their obligation to do everything reasonable to avoid disappointing participants (France Media Ltd, 08 January 2020).
The rules on estimating demand do not apply to prizes, which must be awarded. If the original prize is unavailable, a reasonable equivalent must be offered (rule 8.15.1) and there can be no cost to claim the prize (rule 8.21.1).
For further information see ‘Promotional Marketing: prize Winners' and CAP’s Advertising Guidance on the marketing of promotions with prizes.
This advice is designed to be read in conjunction with Section 8 (Promotional marketing) of the CAP Code and the other relevant guidance. See ‘Promotional marketing: general’ for a list of available guidance.