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” and "from" claims do not 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” and "from" claims do not exaggerate potential savings
In the past the ASA has applied a rule of thumb that 10% of the products or services advertised should usually be available at the "from" or "up to" price based on the 2010 BIS Pricing Practices Guide. In 2016 the CTSI published new Guidance For Traders on Pricing Practices. This new guidance states that, when using “from” or “up to” to advertise a saving, advertisers must ensure that a significant proportion of sale items are discounted at the maximum saving, and that these claims represent the true overall picture of the price promotion.
Whilst the current guidance no longer uses the 10% rule, and instead states that a significant proportion should be available, it offers no further guidance on what is considered a significant proportion, and the ASA will investigate this on a case by case basis. An email ad for a sports supplement which stated “APRIL SALE UP TO 60% OFF PLUS EXTRA 10% OFF” was upheld by the ASA because only 8% of the items available were discounted at 60% off, which was not considered a significant proportion (The Hut.com Ltd t/a My Protein, 11 October 2017).
When assessing whether an “up to” or “from” claim represents the true overall picture of a sale, the ASA is likely to consider the distribution of sale items across different price ranges. Even if a significant proportion of sales items have the maximum saving, if these sale items are disproportionately in the lower price ranges, an “up to” or “from” claim is still likely to mislead, and there should be a roughly even distribution of discounted products across all price ranges. An ad for a January sale which stated “up to 70% off” was upheld by the ASA because the number of sale items which were discounted by 70% was 8.63%, which was not considered a significant proportion, and because the products in the sale were disproportionately from the lower price ranges of products sold by the advertiser (Better Bathrooms UK Ltd, 4 October 2017).
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.