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.
Savings claims are a common promotional tool, often in the form of discounts such as “was £9.99, now £4.99” or sales promotions. Marketers wanting to make claims about the relative cost of their product should ensure that they make the basis of the comparison clear and follow the guidance below to ensure their pricing does not mislead, or is likely to mislead, consumers.
• Ensure the reference price is the usual selling price
• Ensure “up to” claims do no exaggerate potential savings
• Do not artificially inflate prices
• Use the correct terms for introductory offers
Ensure the reference price is the usual selling price
Advertisers must ensure that reference prices are established enough as the usual selling price for a comparison against this price to be genuine and unlikely to mislead. Pricing history and sales data will both affect whether a higher price is sufficiently established as a usual selling price.
Prices used as a basis for comparison should generally have been the most recent price available. The period of time for which the new lower price will be available should not be so long that the comparison becomes misleading. In 2014 the ASA ruled that a promotion offering discounted kitchens was misleading because the 83-day sale period was significantly longer than the 28-day period for which the reference price was available (Homebase Ltd, 5 November 2014). As a general rule of thumb, we advise against using a lower promotional price for longer than the product was on sale at the original price .Some promotions, especially where they involve products tailored to and priced for the individual specifications of the customer, have the potential to be misleading. It is the advertiser’s responsibility to ensure the higher price (reference price) they use to demonstrate a saving has been reasonably established. A promotion on bespoke window fitting was upheld by the ASA because, while in 2016 the products were sold at the higher price and the discounted price for roughly the equivalent length of time, the intervening periods between the promotions were not sufficient in length to establish that the higher prices were the usual prices. The ASA also considered that there were not significant sales at the higher selling price outside of the promotional period to establish this as the usual selling price. It therefore considered the discounted price was likely to mislead consumers (HPAS Ltd t/a Safestyle UK, 28 June 2017).
Ensure “up to” claims do no exaggerate potential savingsWhen using claims such as “save up to”, both the ASA and CAP are likely to expect that all included items are for sale at some level of discount, with around 10% of customers achieving the maximum claimed saving. For example, the ASA ruled that an ad for photographic equipment offering “up to 50% off promotional items” was misleading, because only one of 12 items had a 50% reduction (The Jessop Group Ltd, 24 October 2012). The same principle applies when offering discounted “from” prices (VUR Village Trading No 1 Ltd, 27 April 2016).
Do not artificially inflate pricesMarketers should be cautious when making a savings claim based on recent prices. The ASA upheld complaints about a supermarket ad offering a multi-buy offer on cereals. The product was priced at 97p per box between January 2015 and 5 July 2015, and at £1.38 from 6 July 2015. On 7 July 2015 the product was then included in a mix-and-match multi-buy offer of three packs for £3. The ASA considered the offer misleading because the £1.38 was not the usual selling price (Asda Stores Ltd, 4 May 2016).
Use the correct terms for introductory offers
If a marketer has not sold a product before and wishes to offer it at an introductory price lower than the intended standard price, they should make clear it is an introductory offer rather than discount. Using scored-out future pricing, for example, is unlikely to be suitable. It is also likely that marketers will need to state when the introductory offer will end. At the end of the introductory period, they should ensure the price is increased as indicated.