Who: Advertising Standards Authority (“ASA”), LMnext UK Ltd t/a lastminute.com (“Lastminute”)
Where: UK
When: 29 July 2015
Law stated as at: 17 September 2015
What happened:
Travel website lastminute.com has been censured by the ASA for how it portrayed special offer prices on its website.
The complaint in question related to a “top secret hotel” featured on the retailer’s website. “Top secret hotels” are hotels rooms offered at reduced rates on the basis that the customer does not find out the identity/exact location of the hotel until after they complete the booking process (allowing the hotels to also offer rooms at a higher rate for customers who wish to have certainty as to what they are booking).
Lastminute strikes out with the ASA
In this case, the claim on the website was as follows:
“save 38% Total stay £190.00 £118.50. Based on Standard Non-Smoking Double Room Only”.
A customer complained to the ASA that, in fact, the crossed out price of £190 was the cost of a superior room rather than a standard double room. The claim therefore compared the cheaper price of a standard double against a different, more expensive category of room, making the saving seem bigger than it actually was. A customer who might think that they were saving £71.50 by booking via Lastminute would actually have saved less in reality. The savings claims for the standard room were therefore misleading and not capable of substantiation.
Lastminute’s response indicated that both the standard and discounted “top secret” rates were provided to them by hotels. However, according to the ASA’s report, they did not provide evidence that £190 was the normal price for a standard room, and therefore that consumers could save 38% as stated. The ASA therefore found the ad to be misleading, in breach of CAP Code rules 3.1, 3.7, 3.17 and 3.40.
Why this matters:
This adjudication is a good reminder that primary responsibility for a business’s marketing activity rests with the business, even if, as appears to have been the case here, the pricing is being flowed through from a supplier.
Marketers using strike-through pricing to illustrate a discount should bear in mind that the rules on price comparisons will apply and retailers must ensure that advertising not only complies with the CAP Code but also takes account of the BIS Pricing Practices Guide (the “BIS Guide”). Doing so is itself a requirement of the CAP Code. The CAP Code applies not only to “advertising” in the conventional sense of the word, but also to how products are described and sold on a retail website.
In this case, Lastminute fell short because it did not substantiate the earlier price. However there are a number of other requirements on sellers drawing comparisons with previous prices (including having regard to the length of time that the previous price was offered and an obligation to provide a clear explanation of the comparison). Sellers using strike-through prices should therefore refer carefully to the BIS Guide or seek legal advice to check that the comparisons they are drawing are compliant.
