Savings claims not substantiated and significant limitations omitted – Laura Ashley Ltd
How careful do you need to be in substantiating savings claims? And in what circumstances can you extend a promotional closing date?
Laura Ashley Ltd (Laura Ashley) ran adverts in four emails between January and February 2018:
- the first email stated “Extra 10% of ALL home sale”, with further text reading “SALE CONTINUES – UP TO 50% OFF* HOME + EXTRA 10% OFF*” and “UP TO 70% OFF* FASHION + FURTHER REDUCTIONS”.The asterisks in the text did not link to any further writing;
- the second email stated “Blink and you’ll miss it, 40% off everything ends tonight”, with further text reading “NEW SEASON LAUNCH EVENT ENDS TONIGHT 40% OFF* EVERYTHING”.Again, the asterisk did not lead to any further text;
- the third email stated “Hurry, 40% off EVERYTHING event ends TONIGHT”, with further text reading“due to higher than expected order volumes, some of you may have experienced difficulty online over the weekend in placing your orders” and “OFFER HAS BEEN EXTENDED ENDS MIDNIGHT TONIGHT 40% OFF* EVERYTHING”.Again, the asterisk did not lead to any text; and
- the fourth email stated “Decorating event with up to 50% off starts today”, with further text reading “DECORATING EVENT starts today” and “50% OFF* Wallpaper and fabric, 40% OFF* curtains, 30% OFF* furniture, 30% OFF* paint”.These asterisks also did not link to any further text.
The ASA received a complaint challenging whether: (a) the savings claims in the ads were misleading and could be substantiated; (b) ad (2) breached the code as the closing date had been extended; and (c) whether the ads failed to state significant limitations as the asterisks did not link to any text.
Laura Ashley stated that their promotions were planned six months in advance and there was typically a one to two day break between promotions, although this may change due to unforeseen circumstances such as the extension of the offer in advert (3) due to technical issues. Laura Ashley provided evidence as to their dialogue with their technical team regarding the issues customers had with ordering products.
Laura Ashley also provided pricing information for products from their fabric, wallpaper, paint and ready made curtains stock, along with stating 10% of products in the “UP TO 50% OFF* HOME” and “UP TO 70% OFF* FASHION + FURTHER REDUCTIONS” sales were given the quoted discount. Laura Ashley also stated the asterisks were not linkable to further information, but would amend their ads to ensure a hyperlink was included to direct customers to detailed terms and conditions.
The ASA upheld complaints (a) and (c), but not complaint (b).
In upholding complaint (a), the ASA considered that consumers would conclude a significant proportion of items included in the two sales would be discounted by 50% and 70% respectively, with all products within the “HOME” range included in the up to 50% off sale and all products within the “FASHION” range in the up to 70% off sale. The ASA also considered that consumers would understand from the claims that they would be making a genuine saving against the usual selling price of the product. The pricing evidence provided by Laura Ashley demonstrated that the products were only on sale for the higher “full price” for very limited amounts of time and so these higher prices were not the prices at which the items were usually sold. As such, the savings claims did not represent genuine savings against the usual selling prices. Further, no evidence was provided that a reasonable proportion of items were discounted at 50% and 70% in the two sales. As such, the ASA concluded the claims had not been substantiated and were therefore misleading.
In upholding complaint (c), the ASA noted that the terms and conditions for the sales made it clear the sales only applied to selected items within the relevant ranges, so it was likely some items within the ranges were not included in the sale altogether. However, despite Laura Ashley stating these terms and conditions would be linked to in their future emails, for ads (1) to (4), consumers were likely to understand that the discount would be applied to each product in a given range, when that was not the case. The conditions clarifying that some items were excluded should have been made more prominent in the ad. As the ads failed to state the significant limitations and qualifications of the sales events, the ASA considered them to be misleading.
In rejecting complaint (b), the ASA noted that consumers were likely to understand from the relevant email that the sale would finish at the end of the date of the email, the text “Blink and you’ll miss it, 40% off everything ends tonight” reinforced the impression that consumers would have to act quickly to take up the offer. The ASA noted that the sale was extended another day, and considered that the CAP Code states closing dates must not be changed unless unavoidable circumstances beyond the control of the promoter make it necessary. The ASA considered the evidence provided by Laura Ashley regarding customers’ difficulty in making secure payments and determined that such circumstances were unavoidable and beyond the control of Laura Ashley, and had they not changed the closing date, those who sought to participate within the original terms would have been disadvantaged.
Why is this important?
This ruling reinforces the need for promoters to be able to substantiate all savings claims made in ads, and also to state all significant limitations and qualifications of any sales events. The ASA’s ruling confirms the need to provide evidence demonstrating that any sales event represents a genuine saving against the usual selling price of the products, not a price at which they are sold for a limited time. The ruling also reinforces the need to include all significant limitations on an event; here, the use of asterisks not linking to any further information made it even clearer that certain information may have been omitted.
In rejecting complaint (b), the ASA highlighted its pragmatic approach to promoters extending deadlines, but also reinforced that it is likely to find a breach of the CAP code where a sales event is extended past the closing date for reasons within the control of the promoter.
Any practical tips?
Ensure that you can substantiate any savings claims made in ads. If you cannot provide sales evidence showing the usual selling price of a product, and that the sale presents a genuine saving, you are likely to feel the wrath of the ASA. Further, ensure that any significant limitations are included in an ad and the full terms and conditions are linked to from the text of the ad. On closing dates, only extend these if the circumstances are truly beyond your control!