A banner on Argos’s website home page, www.argos.co.uk, seen on 27 September 2017, stated “3 FOR 2 ON TOYS 1000s OF LINES INCLUDED Mix and match on selected lines, cheapest item free”.
MoneySavingExpert and two members of the public, who understood the price of some toys included in the “3 for 2” promotion was increased when it began, challenged whether the ad was misleading.
Argos said the advertising for the “3 for 2” promotion did not make reference to any previous prices for the toys included in the sale, and therefore made no express or implied claim about the level of saving against previous prices. Because the promotion included thousands of toys, and consumers could select any three of the included products, they believed the only saving message was against the stated price of the cheapest of the three products they selected. Argos said it would not have been possible to indicate any expected level of saving given the myriad of possible combinations of three products a consumer could have chosen.
Argos said they had not deliberately manipulated any of the prices of the toys included in the “3 for 2” promotion. They said the promotion included 3,157 products; 268 of those products had been available at reduced promotional prices on some or all of the seven days leading up to the “3 for 2” offer. They had then returned to their regular price (the price stated in the Argos catalogue) when they were included in the “3 for 2” promotion. Most of those products had been marked with prominent “Was/Now” labelling, which meant customers who had seen those lower prices were fully aware that the price at which those products were available prior to the “3 for 2” promotion was a promotional, non-standard price.
They said that for technical reasons 108 of those products had not been marked with “Was/Now” price labelling. Three of those were the products that had been highlighted by MoneySavingExpert as increasing in price by significant amounts, apparently without explanation. Argos believed that if those products had also been clearly marked with “Was/Now” price labelling, consumers would have understood and accepted the reason behind the higher price for those products as being the end of one promotional price and the beginning of another promotion.
Argos believed that the fact that a very limited number of products increased in price when included in the “3 for 2” promotion (with or without “Was/Now” labelling) did not mean the promotion was materially misleading, given that it did not include any reference to previous prices or other express or implied savings against previous prices. They considered the very small proportion (8.6%) of products that increased in price compared to the total number of products in the promotion would not have had a material impact on a customer’s decision to engage with the promotion.
Argos highlighted that no product in the “3 for 2” promotion was priced higher than its standard catalogue price; prices therefore were not artificially inflated in order to compensate for their inclusion in the promotion. In fact, some products had been at an artificially low, discounted price prior to the promotion. They added that on the first day of the promotion, 92.3% of the included products were available at the same price that had been charged for those products for at least half of the three months prior to the “3 for 2” promotion. The total combined price of all the products included in the promotion was £108,319, compared to £107,103 the previous day. Only 18 products reduced in price following the seven-day promotional period.
The ASA considered that consumers would expect the “3 for 2” promotion referenced in the ad to mean they would be able to purchase three products for the price of two at current prices, and also that those current prices would be prices that would enable them to make genuine savings compared to what they would have paid if they purchased the same products prior to the promotion. As such we considered consumers would expect the price of products included in the promotion to be genuine prices at which the products had previously been sold.
We noted Argos’ explanation that some products had appeared to increase in price due to an error in the labelling of promotional prices on their website, including the three identified by the complainants. However, we noted that when Argos provided the product reference codes for the 268 products which had been available at “Was/Now” promotional prices before the “3 for 2” promotion, only one of those three products was in that list.
We understood that a number of factors might cause a retailer to change the price of products such as toys in any given time period, for example: changes in consumer demand; changes in prices charged by manufacturers; promotional offers on products, ranges, brands or product categories; or the prices offered by competitors. We understood that as a result prices were likely to fluctuate over time. We therefore considered that if there were fluctuations in the price of some products prior to a multi-buy promotion such as a “3 for 2” promotion that would not necessarily mean that ads for the promotion would be misleading – for example, if price fluctuations prior to such a promotion were generally consistent with price fluctuations at other times. We therefore considered that, in this case, one relevant factor in determining whether the savings were genuine was whether the price fluctuations seen in the week preceding the “3 for 2” promotion were generally consistent with price fluctuations at other times.
We selected three dates at random during the three months of pricing history data provided to us by Argos to compare the level of price fluctuations. The data showed that the proportion of products that remained at the same price in the “3 for 2” promotion as they had been for at least one week leading up to the promotion was fairly similar to the proportion that remained the same price in the week leading up to the three other dates we reviewed. However, we noted that the proportion of products which increased in price in the week leading up to the “3 for 2” promotion was higher than that on the other three dates and the proportion which reduced in price was lower than that on the other three dates. We noted that the proportion of price increases (and reductions) in the week leading up to the “3 for 2” promotion was not completely consistent with price fluctuations at other times.
However, we also noted that the pricing history data included the date on which the most recent Argos catalogue had been launched in July 2017. We were therefore able to compare the prices charged during the “3 for 2” promotion with the prices set in the catalogue. We noted that while 44% of prices had fluctuated between the date of the catalogue launch and the start of the “3 for 2” promotion, the majority returned to the catalogue price for the “3 for 2” promotion; 90% of products were the same price in the “3 for 2” promotion as they were in the catalogue.
While price fluctuations in the week leading up to the “3 for 2” promotion were not completely consistent with price fluctuations at other times, we noted that the outcome of those fluctuations was that the majority of products returned to the same price they had been at the time of the catalogue launch. Taking account of the evidence as a whole, we considered the prices charged during the “3 for 2” promotion were genuine prices at which the products had previously been sold and that consumers therefore had had the opportunity to achieve genuine savings. We concluded the advertised “3 for 2” promotion was therefore not misleading.
We investigated the ad under CAP Code (Edition 12) rules 3.1 3.1 Marketing communications must not materially mislead or be likely to do so. (Misleading advertising), 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) and 8.2 8.2 Promoters must conduct their promotions equitably, promptly and efficiently and be seen to deal fairly and honourably with participants and potential participants. Promoters must avoid causing unnecessary disappointment. (Promotional marketing), but did not find it in breach.
No further action necessary.