Background
Summary of Council Decision:
Two issues were investigated, both of which were Upheld.
Ad description
Two promotional e-mails, for an online retailer, were viewed on 12 and 19 December 2011. Both ads were headlined "Mega Monday DEALS Must End Midnight" and featured various products. Both ads included the small print "All products subject to availability. Play.com reserve the right to change prices. Check website for latest availability and pricing ...".
a. The first ad included the console game "Batman Arkham City ...", which was labelled "SAVE 52%". Text below stated "only £17.99" and the adjacent text "was £37.99" was crossed out.
b. The second ad included a "Remote Control Helicopter: Gyro Apache", which was labelled "SAVE £25". Text below stated "£14.99" and the adjacent text "RRP £39.99" was crossed out.
Issue
The ASA received three complaints from members of the public, who had received the e-mails and visited the Play.com website before midnight the same day.
1. Two complainants challenged whether ad (a) was misleading, because the console game was not available at the advertised price when they visited the website.
2. One complainant challenged whether ad (b) was misleading, because the remote control helicopter was not available at the advertised price when they visited the website.
Response
Play.com (Play) said the 'mega Monday deals' were available on their website from midnight on the relevant Monday. The promotional e-mails were sent from 6am the same day and took two to three hours to be fully distributed but no further e-mails related to the 'mega Monday' promotions were sent on the relevant day. They said the e-mails, which featured promotional prices for some of the products that were included in each offer, clearly stated that the offers were available on that Monday only. The full range of discounted products that were included in the offer were available on clicking through to the 'mega Monday deals' area of Play's website. They said such campaigns generally created a significant uplift in sales and they therefore bought a significant quantity of additional stock ahead of each of the promotions in order to meet anticipated demand. They based their estimates of demand on a combination of factors, including the sales made in previous similar campaigns and the proximity to Christmas.
1. Play gave details of their average daily sales figure of the Batman console game for PS3 and Xbox formats in the five days before the relevant e-mail was sent. They said previous 'mega Monday' promotions for similarly popular software products of the same nature had resulted in particular percentage uplifts in sales, the details of which they requested were not published for reasons of commercial confidentiality. They provided examples of sales figures before and during previous similar promotions and said that in each case the uplift they experienced was lower than that they had predicted and therefore none of the items sold out before the offers ended. They said their projections for the Batman game were made using an algorithm that took into account their experience of previous offers and a number of other factors including the expected increase in traffic to the website, the expected number of resulting purchases, how the offer compared with previous 'mega Monday' offers, how new the product was, any offers being run by other retailers and the proximity to Christmas. They had anticipated that the game might be even more popular than average and bought sufficient units across both PS3 and Xbox formats to represent a particular percentage increase in comparison to their average daily sales rate in the five days preceding the promotion and in comparison to the uplift in sales in the previous promotions. They believed that in all circumstances these amounted to a reasonable estimate of the likely uptake of the item during one day's trading.
Play said, however, that actual demand for the product significantly exceeded even their anticipated sales and therefore equalled sales of their fastest selling game ever. They sold out of both formats before 4pm on the day of the promotion and as soon as they became aware that it was likely to sell out, they updated the 'mega Monday deals' area of the website to remove references to the product and replaced it with an alternative software offer. They said that due to the volume of orders being placed, approximately 20 orders were placed during the short delay between the product selling out and the promotional area of the website being updated. Play fulfilled those orders at the special offer price using stock that was intended to be sold at the usual full price; it was bought by them to be sold on that basis. They believed that demonstrated their commitment to ensuring that all customers who placed an order while the promotional price was still displayed on the website were able to buy the product at the advertised price. They believed, therefore, the e-mail was not misleading.
2. Play said the uplift in average sales for products such as the remote control helicopter was generally less than for console games and did not usually exceed a particular percentage increase in their 'mega Monday deals' offers, the details of which they also requested were not published for reasons of commercial confidentiality. They again gave details of their average daily sales in the five days prior to the e-mail being sent, along with examples of sales figures before and during previous similar promotions. They said that in the previous promotions sales again did not exceed their projections. Based on that, and also using the algorithm they had used for the Batman game, they had purchased enough remote control helicopters to represent a particular percentage increase in their daily average sales in the five days preceding the promotion, which they again believed was a reasonable estimate for one day's trading.
Play said demand for the helicopter was also greater that they could reasonably have expected and the items had sold out at approximately 4.30pm. They again updated the 'mega Monday deals' area of the website to remove references to the product although it remained available to purchase via the standard listing on their site. They said a large number of customers successfully purchased the helicopter at the discounted price on the day of the promotion and they therefore believed customers were not in any way misled by the offer advertised in the e-mail.
Play believed the e-mails were not misleading, because a significant quantity of the two products was available at the advertised price when the e-mails were sent and until late in the afternoon on each Monday. They did not send further e-mails relating to the 'mega Monday' promotions and believed they had made a reasonable estimate of demand; indeed they had believed they had over compensated, particularly in the case of the Batman game. Play said the ads also did not omit any material information about the promotions. They did not expect to run out of the products and therefore the exact number of items available was not material and did not need to be stated in the e-mails, which indicated that there were a finite number of products available via the text "All products subject to availability. Play.com reserve the right to change prices. Check website for latest availability and pricing ...". They said that, in conjunction with the headline "Mega Monday DEALS Must End Midnight", would be clearly understood as meaning that products would be available at the advertised prices until no later than midnight but that they might become unavailable before then and that consumers should click through to the website to see which products were still available at the promotional prices. They believed it was also clear that the products might still be available elsewhere on the site but at different prices to those referred to in the e-mails.
Play said they had taken all possible steps to avoid disappointing consumers, including making more stock of the Batman game available to those consumers who had placed their orders immediately after the promotional stock had sold out but before the website was updated to no longer feature the product at the discounted price. They acknowledged that the complainants might have been disappointed that they could not purchase the game at the advertised price but said consumers who did purchase the product while special offer stock was available were not disappointed. They said once promotional stock had been sold, they would always update their website to ensure it accurately reflected the price at which the item was then being sold. However, that did not detract from the fact that at the time the e-mails were received considerable stocks of the product were available at the advertised price. They said that in order to locate the products being sold at higher prices on their website, the complainants would have had to navigate away from the promotional page, which was clearly labelled as such, and visit the main site, where it would have been clear the items listed were not being offered at discounted prices. Play said that in usual circumstances they were able to meet all orders placed by their customers and that the current price of the product was always made clear to consumers before they placed an order.
Assessment
1. & 2. Upheld
The ASA noted that Play believed they had made a generous estimate of demand for both products, based on factors including sales in previous similar promotions and in the five days preceding the advertised promotions. We considered, however, non-promotional sales in the five days preceding the promotions did not alone constitute a directly relevant comparison to the sales that could be anticipated with a promotional price. We also noted we had not seen any evidence related to the sales made in the previous similar promotions or, for example, details of the reductions offered for the toys used as the basis of estimated demand for the helicopter and of when the previous toy promotions took place. In relation to the Batman game, we noted that one of the previous promotions Play said was used as a comparison took place on 17 December 2011 and was therefore not relevant to the estimate made in the current promotion, which took place several days previously. We noted that the other two previous promotions took place on 5 and 28 November 2011, rather than, for example, the estimate being based on a comparable promotion that took place during the same part of pre-Christmas trading a previous year. We considered we had not seen sufficient information to demonstrate Play had made a reasonable estimate of demand.
We noted Play said they had sold significant quantities of both products at the advertised promotional prices in the current promotions and had not expected the promotional stock to sell out in either instance. However, we also noted we had also not seen any evidence, for example in the form of sales data, to demonstrate the number of Batman games and helicopters that had been sold at the advertised promotional prices. Nevertheless, while we acknowledged that they had not anticipated running out of promotional stock, we noted that in the case of both the Batman console game and the remote control helicopter, Play continued to have the items in stock, albeit intended for sale at their original price, once the promotional supplies were exhausted. We noted that they fulfilled 20 additional orders of the Batman game after the promotional stock was sold out but that, that aside, they continued to sell both products at higher prices subsequently on the same day as the promotions. We noted that all three of the complainants had visited the website during the afternoon of the relevant Monday to find the products listed at prices higher than the promotional rates advertised.
We noted that the text "... Must End Midnight" appeared in the headline of the ads and, although they included the small print "All products subject to availability. Play.com reserve the right to change prices. Check website for latest availability and pricing ...", we considered the overall impression was that the advertised prices would be available until midnight on the relevant Monday, in particular because the e-mails did not make clear that stock for purchase at the promotional prices could be limited. Because the ads did not make clear the promotional stocks were limited and might not be available at the advertised prices until midnight that day, and because they continued to have stock of both items, we considered Play should have made further stock available to avoid disappointing consumers and should not have continued to sell the products at higher prices on the same day as the promotions. We concluded that the ads breached the Code.
The ads 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),
3.27
3.27
Marketers must make a reasonable estimate of demand for advertised products.
and
3.28.1
3.28.1
if estimated demand exceeds supply, marketing communications must make clear that stock is limited
(Availability) and
8.9
8.9
Phrases such as “subject to availability” do not relieve promoters of their obligation to do everything reasonable to avoid disappointing participants.
and
8.10
8.10
Promoters must be able to demonstrate that they have made a reasonable estimate of the likely response and either that they were capable of meeting that response or that consumers had sufficient information, presented clearly and in a timely fashion, to make an informed decision on whether or not to participate - for example regarding any limitation on availability and the likely demand.
(Sales promotions).
Action
The ads must not appear again in their current form. We told Play to ensure they were in a position to demonstrate they had made a reasonable estimate of demand in future. We also told them to ensure future ads made clear if promotional stocks were limited.
CAP Code (Edition 12)
3.1 3.27 3.28.1 3.3 3.9 8.10 8.9
