Who: The Advertising Standards Authority (ASA) and Happy Beds Ltd (Happy Beds)
Where: United Kingdom
When: 14 December 2022
Law stated as at: 16 January 2023
The ASA reported on a recent ruling against Happy Beds Ltd on 14 December 2022. A child’s bed frame was listed on Happy Beds’ website in August 2022, with the text “Milo Grey Wooden Mid Sleeper Kids Bed Frame – 3ft Single £845.98 Now £469.99 Save £376”. A claimant questioned whether the savings claim could be substantiated, believing the advertisement to be misleading.
According to Happy Beds Ltd, as a result of them being an online retailer the original recommended retail price (RRP) price was not determined by them, but rather by the supplier or manufacturer. Links were provided showing evidence of other retailers who were selling the bed frame at a comparable RRP price. Two anonymised receipts proving the product was sold for the original RRP price between February and May 2022 were also provided as evidence.
The ASA upheld the complaint. It was found that Happy Beds Ltd had breached the UK Code of Non-Broadcast Advertising and Direct & Promotional Marketing (CAP Code) rule 3.1 (Misleadingness), 3.7 (Substantiation), 3.17 (Prices), and 3.40 (Price Comparisons). When the RRP differs significantly from the price at which the product or service is generally sold, price comparisons are likely to mislead.
A review of the evidence provided by Happy Beds Ltd, which demonstrated that other retailers displayed similar RRPs to Happy Beds on their listing, was conducted by the ASA. The ASA noted that the price was discounted in all cases, and none of the retailers were advertising or had advertised the product at the RRP. They concluded that the higher price on the other websites was likely to be the manufacturer’s RRP, since the product had been discounted.
The ASA also found that the examples of where the product had been sold at the RRP, in February and May 2022, was not enough to support saving claims against an RRP, and that they needed to see evidence showing that £845.98 was the price in which the product was sold across a number of retailers.
As a result of the ASA having not seen sufficient evidence that the product had been generally sold at the higher price they concluded that the ad was misleading.
Happy Beds Ltd were told that the ad cannot appear again in the form complained of, and all future comparisons in their advertisements should not mislead by making false claims of price advantages. The reduction in price should only be displayed if it can be demonstrated that the product had generally been sold at the original RRP price.
Why this matters:
The Happy Beds ruling has provided evidence that careless advertising strategies do not come without repercussions. It is highly likely that similar claims will be on the ASA’s radar in the near future. It is therefore important that retailers, who use similar marketing strategies, rethink their approach to promotional advertising, and understand the ramifications of such misleading advertising.