An app for FreePrints, a photo printing company, seen on 18 March 2021, included text on the homepage which stated, “FREE PHOTO PRINTS DELIVERED TO YOUR DOOR” and “FreePrints® No Subscriptions. No Commitments.™ Just Free Prints!”.
The FAQ page stated, “How much is delivery? Standard delivery starts at £1.49 and is never more than £3.99!” and “your photo prints will arrive within 7-10 days”.
IssueThe complainant, who believed that the delivery fee included the cost of the prints, challenged whether the claims that the photo prints were “free” were misleading.
PlanetArt UK t/a FreePrints responded that their regular practice was to include a disclaimer which indicated that consumers would pay for postage, which was not included in the ad complained about. They also said that consumers would reach the app having seen a preceding ad that directed them to it, and that any preceding ad would have included a disclaimer which made clear postage was payable. They said that they would make changes to the ad to ensure that they included a qualification that made clear that consumers would pay for postage.
With regard to use of the name “FreePrints”, PlanetArt said that “FreePrints” was not a descriptive marketing communication. They said that consumers would understand the name to be that of the brand, and that it was not descriptive of a completely free service. Consumers would understand that it meant prints could be ordered without paying for the prints of the photos themselves because it allowed consumers to order 45 photo prints (of 6 x 4 inch size, one per photo) per month and 500 prints per year (other sizes, picture books, wall décor and other items, and larger orders, were subject to charge for the prints themselves). They said the “FreePrints” specifically referenced the service of free printing and was also a registered trademark. They referred to the example of Freeview, which also sold products on their website despite their name including the term “free”.
They also said that first time users of the app were given the opportunity to trial the service completely for free, for up to ten 6 x 4 prints at no charge whatsoever (including no charge for postage).
PlanetArt acknowledged that the CAP Code included the principle that marketing communications must not describe a product as “free” or similar if the consumer had to pay anything other than the unavoidable cost of responding and collecting or paying for the delivery of the item. They said that orders from FreePrints were subject to a £1.49 minimum delivery charge and a maximum delivery charge of £3.99, and the postage charge increased in increments depending on the number of prints ordered and size of those prints. The printing, packing and handling aspects of their client’s services were contracted to a third party, and because of that PlanetArt were not able to say precisely what the cost of postage was for a particular envelope, or how large it was.
PlanetArt said that they did not inflate their postage charges, and the amount charged to consumers reflected the overall cost to them of delivering the items. They said that they did not make any profit from the postage charges overall. They said that their decision to have a series of simple, stepped delivery charges provided certainty and consistency at the point of purchase as to the amount charged. Without that, consumers would have no idea what they were going to pay until they go the final page of the shopping.
PlanetArt acknowledged that, because of the pricing structure that they had chosen, it was the case that if a customer ordered a very small number of prints, for example only one 6x4 print, then the applicable postage charge of £1.49 would exceed the actual minimum cost required to send that item. Equally, however, where a customer ordered hundreds of prints, the £3.99 maximum charge would be significantly less than the actual cost of postage. They provided data which compared the bulk price of mailing their prints compared to the standard cost of delivery, which they said demonstrated that, overall, PlanetArt did not make any profit from the delivery charge.
In response to the question as to how PlanetArt could justify offering a quantity of free prints to consumers, PlanetArt said that it made a loss in relation to that offer. It commented that every free offer in a commercial context was designed to reward and change consumer loyalty and behaviour to favour one service provider over its competitors. Consumers would understand that, and competitors used a similar model. PlanetArt provided a price comparison between their business and competitor businesses to demonstrate that their delivery charges were similar or cheaper than other businesses that operated within the sector.
PlanetArt referred to the CAP AdviceOnline on postage and packing, which stated in one place, the “the ASA reminded the advertiser that an offer should be described as free only if consumers paid no more than the true cost of freight or delivery”, but later stated that “to legitimately describe a product as ‘free’ promoters may charge only for the minimum unavoidable cost of responding to the promotion, the true cost of freight or delivery […] in other words promoters can charge the actual uninflated cost of postage”. They said that there was a difference between, on the one hand, the “true cost of freight or delivery” and the “actual uninflated cost of postage” and, on the other hand, the “minimum unavoidable cost”. But in any event, PlanetArt considered that neither test reflected the complexity of the way that postage and delivery charges actually worked because the days of a single fixed price on a postage stamp (what was called the “public rate of postage”) had been overtaken by a variety of available services and pricing models from a variety of delivery companies, reflecting different standards of reliability, speed and volume.
PlanetArt considered that the proper test in cases where products were offered as “free” was that an advertiser was entitled to charge the actual cost of postage, provided it did not make a secret profit or concealed charge for the goods by uplifting those costs. If an advertiser chose to use a courier or delivery format that was more reliable or speedier than a cheaper option then they should be entitled to do so without that choice meaning that the goods being delivered were no longer capable of being referred to as “free”. PlanetArt further believed that the ASA rules should not fix maximum delivery charges at the level offered by the Royal Mail, because it was no longer a monopoly provider nor indeed a proper or objective benchmark to judge delivery cost.
PlanetArt submitted that the complaint was the only complaint which had been made to the ASA about its advertising in the UK, despite being a service which had been used by many millions of UK Consumers in relation to tens of millions of orders of prints. As regards the general policy of the ASA in relation to postage charges in the context of the use of the word “free”, they considered there remained an ambiguity between statements that the only charge which could be made for postage was either (i) the minimum cost of effecting delivery or (ii) a cost which could be higher than the irreducible minimum, provided that the advertiser did not artificially ‘load’ or uplift that charge in order to make an extra charge beyond the actual cost incurred.
The ASA noted that use of the word “free” in advertising had long been the subject of special rules. The CAP Code required that marketing communications must not describe a product as “free” if the consumer had to pay anything other than the unavoidable cost of responding and collecting or paying for the delivery of the item. Marketing communications must not describe items as “free” if the consumer had to pay packing, packaging, handling or administration charges for the “free” product.
PlanetArt were entitled to charge consumers for the unavoidable cost of delivery or freight for their free products. However, we needed to see evidence that the cost that had been charged to consumers who wanted to take advantage of the free offer reflected the actual cost of delivering the items. PlanetArt had acknowledged that consumers who ordered a small number of prints using the “Free” offer would be paying more than the actual cost of delivering the items whereas consumers who purchased higher numbers or larger prints would pay less. Although some customers who ordered a large number of prints were charged postage less than the actual cost of postage to PlanetArt, that was not relevant to the “free” claim because those customers would be ordering more than the 45 “free” prints which the service allowed for each month. In addition, we considered that the cost of postage charged needed to reflect the actual cost for all customers taking up the “free” offer, and not just some. PlanetArt had said they were unable to provide a breakdown of the price for each individual delivery because they used a third party which handled the administration and delivery of PlanetArt’s millions of orders and so the price which PlanetArt was itself charged included printing the address label, placing the prints into an envelope and arranging their carriage, and VAT on those elements. We were therefore concerned that they were unable to demonstrate that the charges passed on to customers using the “free” offer did not include some element of packing, packaging, handling or administration charges.
We undertook a test purchase of ten standard size photos which was delivered by Royal Mail second class, which we understood cost less than the minimum postage of £1.49 charged by PlanetArt. We understood that PlanetArt’s handling company used different services depending on a variety of factors including cost and reliability. Nonetheless, we considered that it demonstrated that in some cases consumers were paying more than the minimum cost of postage as charged by Royal Mail second class to obtain the “free” prints.
We acknowledged that PlanetArt used a third party which also handled packing and administration of delivery. However, we considered it was their responsibility, having chosen to operate a “free” offer, to ensure that they complied with the requirements of the CAP Code, including being able to demonstrate they did not charge anything other than the actual postage cost. In addition, the CAP Code required that marketing communications must not mislead by action or omission, and must make clear the extent of the commitment the consumer must make to take advantage of a "free" offer. The ASA considered that company and product names, when included in, and likely to be read as claims in, marketing communications, must also comply with the Code. The ASA considered that consumers would understand the claim “FreePrints” alongside the claims “FREE PHOTO PRINTS DELIVERED TO YOUR DOOR” (in a postal franking style stamp) and “No Subscriptions. No Commitments.™ Just Free Prints!” would mean that those consumers would be able to obtain prints at no cost. We had not seen any of the messaging that consumers would have seen before obtaining the app (prior to March 2021), and the more recent messaging that we had seen we considered did not dispel the overall impression created by the ad that the prints could be obtained entirely for free. Given that the ad failed to state (at least unless and until the consumer read the FAQs) that consumers were required to pay for postage, we considered that the ad was misleading.
We acknowledged PlanetArt’s response that the specific ad had been the subject of a mistake, and that all ads since then and in future would include a qualification explaining that consumers would need to pay a fee for delivery, but for the reasons set out above we concluded that the claim “free”, including the use in the ad of “Free Prints”, was misleading and breached the Code.
The ad 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 (Misleading advertising), 3.9 (Qualification), 3.1 3.1 Marketing communications must not materially mislead or be likely to do so. (Prices), 3.23 3.23 Marketing communications must make clear the extent of the commitment the consumer must make to take advantage of a "free" offer. 3.24 3.24 Marketing communications must not describe items as "free" if: and 3.24 3.24 Marketing communications must not describe items as "free" if: 1 (Free).
The ad must not appear again in the form complained of. In addition, we told PlanetArt UK Ltd t/a FreePrints to make clear if postage charges were payable when making “free” claims. We also told them not to describe items as free or use the name “FreePrints” if consumers had to pay anything other than the unavoidable cost of responding and collecting or paying for the delivery of the item. They must not use the term “free” when charging for packing, packaging, handling, or administration charges for the “free” product.