Ad description

An ad for the Apple iPad 2 Tablet PC was seen on the website of Ebuyer (UK) Ltd on 30 March 2011. The price of £665 had been scored through and text stated "Save £16.00 Now £649.00".

Issue

One reader challenged whether the saving claim was misleading because they understood the product had been available for five days only and could not therefore have been advertised at the higher price for a reasonable period of time.

Response

Ebuyer (UK) Ltd (Ebuyer) said they were an exclusively online company with a selection of over 19,000 products available on their site. They said it was necessary for online retailers to have a pricing policy that was both proactive and reactive and they therefore utilised price comparison tools, site spiders and internal systems to monitor their competitors’ prices and adjust their own as necessary. They explained that the Apple iPad2 Tablet PC was launched on 25 March 2011 at a price of £559 and that demand was such that recommended retailers sold out very quickly. They said they received their stock on 28 March and that they assessed the marketplace before deciding to list the product at £665. They stated that, after monitoring market pricing and availability, they decided to reduce the price to £649 on 30 March, at which time their system automatically adjusted the price display to show a saving of £16. They provided details of the sales made between 28 March and 30 March, when the product went out of stock. They pointed out that the lower price was offered for less time than the higher initial price and said the price reduction was therefore a genuine saving for customers.

Assessment

Upheld

The ASA noted that Ebuyer felt it was necessary to adopt a pricing policy that allowed them to respond quickly to changes in the marketplace and we understood that this pricing policy meant they regularly adjusted their prices. We considered, however, that readers would understand from the way that prices were displayed that the initial price was one at which Ebuyer had generally sold the product for a significant period immediately preceding the price reduction. We considered that, if this were not the case, information regarding the period during which the initial price had been offered should have been included.

Although we accepted that Ebuyer monitored competitors’ prices in order to arrive at an initial price they considered reasonable, we noted that in this case the initial price was higher than the RRP of £559 used by the manufacturer’s recommended retailers. We also noted that the number of products sold by Ebuyer at the initial price between 28 and 30 March was significantly lower than the number sold at the reduced price on 30 March. We therefore considered that Ebuyer had not sold a sufficient quantity over a sufficient period to establish their initial price as one at which they had generally sold the product. Because of this, and because the ad did not state the period during which the initial price had been offered, we concluded that the ad was misleading.

The ad breached CAP Code (Edition 12) rules 3.1 (Misleading advertising), 3.17 (Prices) and 3.40 (Price comparisons).

Action

The ad must not appear again in its current form. We told Ebuyer not to display new prices as a price reduction unless the product had been sold at a previous price in sufficient numbers and over a sufficient period to establish it as the price at which they had generally sold the product.


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