Who: The Advertising Standards Authority (ASA) and Carpetright Ltd (Carpetright)
Where: United Kingdom
When: 25 January 2023
Law stated as at: 8 February 2023
Carpetright’s banner ads, which appeared between January and February 2022, were challenged by Tap Carpets and Floors Ltd because they believed savings claims in the ads were misleading since only a limited number of products were available with the advertised discount, and they weren’t sold at the higher undiscounted price. An example of one of these ads is as follows;
“A page on the advertiser’s website, www.carpetright.co.uk, seen on 1 February 2022 at 18:35 stated “up to half price” over images of carpets, wood flooring, vinyl, luxury vinyl (LVT) and laminate.”
The advertiser agreed to amend its advertisement after one of the leading summaries was upheld, and the other was resolved informally.
The company provided evidence to the claims in the form of: the price, discount percentage, volume sold for each product; the volume sold at promotional prices, non-promotional prices, and the percentage that were sold at non-promotional prices in the past 6 months; and how many weeks the product line has been promoted.
Further, it provided a breakdown of the number of product lines they offered in each subcategory, as well as a number of product lines on promotion at a discounts ranging from 20% to 50% and how many products were sold during this period.
According to Carpetright, up to 45% of its total range was discounted each week during the promotional period based on data related to each product category. It stated that the fact that the products were included in the promotion period shows that they were sold outside of the promotion period at their undiscounted prices. During the promotional period, Carpetright argued that the undiscounted price shown as the “was” price was a genuine representation of the price at which the product was normally sold.
The ASA upheld the complaint.
During the ASA’s investigations, it took on board the advice on consumer protection laws offered by the Chartered Trading Standards Institute (CTSI). The guidance on pricing practices said that promotions were likely to comply, if the reduced price was charged for the same or a shorter period than the reference price.
Carpetright had stated that no product would be promoted for more than 26 weeks in a rolling 52-week period. In return, the ASA noted that a number of products had been discounted for over half the period of that time, and were subsequently discounted for longer than they had been sold at their higher price.
Further, the ASA considered that due to the lack of clarity on the usual selling price, combined with the fluctuations, consumers may question the authenticity of the “saving”.
As per CTSI guidelines, sales at higher prices should be considered when determining authenticity of a “saving” promotion. Between October 2021 and April 2022 it was proven that some product lines were never sold at their higher price.
Misleading savings claims
The ASA alleged that consumers were likely to understand that a significant proportion of products in the ads would be discounted by the “up to” amounts and that the advertised savings represented a genuine saving. As a result, it concluded that the savings claims were misleading as they did not represent genuine savings, contrary to the usual selling price of the products. The ASA found the advertisements to be in breach of rules 3.1 (misleading advertising), 3.17, and 3.22 (prices) of the UK Code of Non-broadcast Advertising and Direct & Promotional Marketing.
In order to avoid misleading consumers and to ensure the ads do not appear again in the form complained of, Carpetright Ltd was told that any future savings claims must be accompanied by a genuine usual selling price and show that a significant proportion of products had the maximum saving.
Why this matters:
With the ASA’s combative reaction against misleading promotional advertising, companies are reminded of the dangers of discrepancies in their marketing strategies. It is imperative for retailers to understand that inconsistencies in their pricing could mislead consumers and result in the ASA’s action. In order to avoid such consequences as those described above, retailers must be clear and concise in their promotional advertising, and seek necessary advice where needed.