Topic: Prices
Who: Toys “R” Us Limited (“Toys “R” Us”) and the Advertising Standards Authority (“ASA”)
When: 13 March 2013
Where: UK
Law stated as at: 25 March 2013
What happened:
Toys “R” Us took out an advert in The Sun newspaper, headed “Toys “R” Us Christmas gift ideas!”, which listed a number of toys on sale. One of the offers on the advert read: “HALF PRICE…AVIGO BATTERY POWERED MINI COOPER S 6V…£129.99 EACH Was £259.99 each”.
However, given that the item had been available for £129.99 or less for several months prior to the promotion, the complainant contended
that the level of savings alleged by the advert was misleading.
Toys “R” Us highlighted the fact that prior to the sale, the item had been available at £259.99 for 28 days and therefore that the savings advertised were correct. It alluded to the BIS Pricing Practices Guide
(the “Guide”) which recommends that the price to be used for such a
comparison should be the most recent price at which the item is sold for 28 days or more. In this respect, by advertising the original price as £259.99, Toys “R” Us submitted that they had adhered to the Guide.
ASA takes long view on pricing
The ASA acknowledged that the item had indeed been priced at £259.99 for 28 days prior to the start of the promotion. However, it noted that in the year prior to that 28 day period, the item had been priced at £129.99 or less for approximately 42 weeks out of 52. In addition to this, after the 28 day period the item was sold for £129.99 or less for 19 weeks (and was even sold for as little as £99.99 for four days) before the £259.99 price tag was restored.
The ASA referred once again to the Guide. This states that price comparisons must be reasonable in terms of time. In particular, it
suggests that the period of time for which a new lower price is available should not be longer than the period of time for which the item was listed at the previous higher price.
In this case, the ASA pointed out that both before and after the sale, the item was available at £129.99 for significantly longer than it
had been sold at the higher price of £259.99. Consequently, the price
comparison and the associated claims that customers would benefit from a saving were held to be misleading. Toys “R” Us was instructed not to let the advert appear again in its current form and to ensure that its price comparisons are not misleading in the future.
Why this matters:
Advertisers must bear in mind the duration for which they intend to sell an item at a discounted promotional price relative to the amount
of time that it was sold at the higher price stated on the advert.
Although the Guide states that a period of 28 days preceding the promotion will generally be a sufficient duration for price establishment purposes, this case shows that this is not an absolute rule and whether the price indication is misleading will depend on the circumstances.
The ASA will take into account the general pricing trends both before and after the promotion when judging whether an advert is misleading. It may go back several months, or even years, before the promotion in order to assess whether the higher original price stated is accurate and will then view this within the context of the amount of time that the lower promotional price is available.
