Recently published “Advice” from the Committee of Advertising Practice, which writes the ASA-enforced “CAP” Code of Advertising, Sales Promotion and Direct Marketing, focused on whether marketers can charge for both postage and packing when making offers that are otherwise supposedly “free.” Omar Bucchioni provides all-inclusive comments.
Topic: Promotion marketing
Where: Advertising Standards Authority
Law stated as at: 25 April 2009
In recent News and “Advice Online” and in its proposed new “CAP” “Code of Non-broadcast Advertising, Sales Promotion and Direct Marketing”, due to supplant the existing CAP Code in 2010, the Committee of Advertising Practice (“CAP”), the ad industry body that writes the ad codes enforced by the Advertising Standards Authority (“ASA”), has made its position clear on charges for “postage and packing” or “postage and packaging” in conjunction with supposedly “free” offers.
In November 2007, CAP and the Broadcast Committee of Advertising Practice (BCAP) issued joint guidance on use of the word “free” in either broadcast or non-broadcast advertisements: http://www.asa.org.uk/NR/rdonlyres/F0E69FAA-AAD6-402B-A390-5001C41FF4FE/0/use_of_free.pdf.
The CAP Code states (clause 32.5) that “An offer should be described as free only if consumers pay no more than:
(a) the minimum, unavoidable cost of responding to the promotion, e.g. the current public rates of postage, the cost of telephoning up to and including the national rate or the minimum, unavoidable cost of sending an e-mail or SMS text message;
(b) the true cost of freight or delivery;
(c) the cost, including incidental expenses, of any travel involved if consumers collect the offer.
Promoters should not charge for packing, handling or administration”.
Arguably there is a difference between the term “packing” and “packaging.
According to a CAP March 2009 News item at
http://www.asa.org.uk/cap/news_events/news/2008/CAP+sends+packaging+packing.htm some promoters rely on the distinction to argue that unlike the act of packing, the cost of essential packaging, such as a Jiffy bag, to ensure safe delivery of promotional goods should be passed on to the consumer provided they can demonstrate it is neither unreasonable nor inflated. If they can show that consumers are charged the actual cost of the packaging and that cost is stated clearly, why shouldn’t promoters charge for packaging?
CAP disagrees. It believes that with free offers, consumers should pay the current rate of postage only and marketers describing their promotions as “free” should therefore not charge for packaging any more than they should charge for “packing.”
What prompted the above pronouncement and the “Advice Online” item was an ASA case reported in January 2009. The ASA upheld a complaint against Direct Home Shopping Brands Ltd about a “standard delivery charge” of £3.95 and 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, such as the public rate of postage http://www.asa.org.uk/asa/adjudications/Public/TF_ADJ_45711.htm.
Proposed new Code treatment
To put the matter beyond doubt, the CAP proposes to tighten up the relevant wording in the new, radically revised “non broadcast” Code of Advertising, Direct Marketing and Sales Promotion which is due to supersede the current Code in 2010.
In the new code consultation document the commentary states unequivocally “Promoters [of free offers] should not charge for packing, handling or administration.”
The notes go on to accept that the current CAP Code wording referring only to “packing” is ambiguous as it could be seen to refer to either to packaging or the labour involved in packing the “free” product. Because the CAP believes the ASA would have difficulty determining the whether charges for packaging reflected the true, uninflated cost of packaging, CAP proposes to amend the rule to include an explicit reference to packaging.
The proposed new rule will state as follows:
“Marketing communications must not describe items as “free” if “the consumer has to pay for packing, packaging, handling or administration.”
Why this matters:
Promoters who have, until now, charged for “Postage & Packing” need to be aware that the ASA is seriously considering banning any use of the word “free” if there is a charge for packing, packaging, handling, administration, insurance or other charges. Will this be the end of promotions of goods that require packaging or will this be great news for nationwide retail chains from which consumers can collect their promotional goods genuinely free of charge? Time will tell.