Who: The Advertising Standards Authority (ASA) and Maple Syrup Media Ltd t/a Quidco, Quidco.com (Quidco)
Where: United Kingdom
When: 18 August 2021
Law stated as at: 29 September 2021
What happened:
In August 2021, the ASA ruled that two ads by Quidco breached the UK Code of Non-broadcast Advertising and Direct & Promotional Marketing (CAP Code) on the basis that they were misleading. The ads were pages on a website for Quidco.com, a service which offered cashback to their members when they made purchases from certain retailers.
There were two versions of the ads for non-logged-in and logged-in visitors. The claims are set out below:
- Non-logged-in claims: “Up to 8% cashback … 8% cashback for all purchases of £100 or more … 2% cashback for all purchases up to £99.99”.
- Logged-in claims for members signed up to the basic plan: “5.6% cashback for all purchases of £100 or more …1.4% cashback for all purchases up to £99.99″.
The page also included two sections headed “What will stop me earning cashback?” and “Good to know” which provided more information about limitations to the cashback offers. Under “Good to know”, the text stated: “The vast majority of merchants do not pay cashback on the full basket price, they pay cashback minus VAT, delivery charges, card payment fees, surcharges, taxes and any other additional charges, occasionally some may pay cashback on the full basket amount.”
The complainant stated both ads were misleading on the basis that cashback was not paid back on the VAT part of the purchase, and neither of the ads made this sufficiently clear.
Quidco argued that some retailers did in fact calculate the cashback based on the total basket price (that is, including VAT), while others calculated the cashback from the core basket price (excluding VAT). They also explained that the non-logged-in version was worded in that way because consumers may be confused by the references to VAT, while the logged-in version provided some context for the claims.
The ASA considered that the consumer’s decision to become a Quidco member or make a purchase with a retailer would be affected by how much cashback they anticipated receiving. As a result, the ASA ultimately held that both ads were misleading because Quidco should have made clear that the amounts that consumers needed to spend to take advantage of cashback offers should not imply that the cashback rates related to the total spend, where they instead related to the total spend minus VAT, delivery charges and other fees (the core basket price). In particular, where cashback amounts were related to the core basket price, any claims about the cashback should be clearly qualified with a disclaimer stating that cashback amounts were calculated after excluding VAT, delivery charges, and other fees from the total basket price.
Although the logged-in version of the ad did include some information about how the cashback was calculated under “Good to know”, the ASA nonetheless considered that this was insufficient as it did not make clear that eligibility for a cashback offer was also calculated on this basis. For example, in instances where the cashback was calculated according to the core basket price, this would mean the core basket price would need to be £120 to be eligible for the 8% cashback. Additionally, the ASA felt that the disclaimer text also did not make clear whether this applied to the specific offers on the page given how generally it was worded.
Why this matters:
Readers may be surprised to see that, in relation to the logged-in version of the claim with the “Good to know” disclaimer, the ASA still felt that the claim was misleading – in part because the disclaimer was not deemed specific enough to the offers shown on the page and it also left some aspects of the cashback calculation open to uncertainty (in particular, the eligibility around the offers). Advertisers should therefore be aware that the phrasing of any disclaimer should be carefully considered as it may not mitigate the risks of misleading claims if it is not adequately worded.
