“Was/now” price claims: Zestify Media

What price can be stated as the “was” price to represent a genuine saving when compared with the “now” price?

The background

A complaint was made to the ASA about a TV ad for Zestify Media, which showed a crossed-out “was” price of £39.99 and a “now” price of £19.99, accompanied by a pink circle claiming “SAVE 50%”. The complainant alleged that the “was” price was misleading, believing that the product (an epilator) had in fact not been sold for £39.99.

Zestify Media explained that the product had been priced at £39.99 online for a period of 74 days, between 18 July 2018 and 30 September 2018. This was endorsed by Clearcast, who confirmed that Zestify Media had provided them with an assurance that the product had been priced at £39.99.

The decision

The ASA upheld the complaint: the ad was misleading. Although the epilator had been priced at £39.99, it had not actually been sold at that price. Further, the lower price of £19.99 had been in effect for 96 days, from 1 October 2018 to 5 January 2019 (when the ad was seen by the complainant), a much longer period than the 74 days when the higher price had applied.

The ASA referred to the Chartered Trading Standards Institute’s (CTSI) Guidance for Traders on Pricing Practices, which includes guidelines on reference pricing (namely, “price promotions which aim to demonstrate good value by referring to another, typically higher, price”). The Guidance provides, among other factors, that where “the price comparison is made for a materially longer period than the higher price was offered” or a retailer “repeatedly uses a reference price knowing that it had not previously sold a significant number of units at that price”, then it is less likely to represent a genuine saving, and more likely to be misleading.

Since the epilator had been on sale at the lower price for materially longer than at the higher price, and no sales had been made at the higher price, the ASA agreed that the reference price of £39.99 was misleading and purchasing at the lower price of £19.99 did not represent a genuine 50% saving as the ad claimed. 

Why is this important?

Despite the fact that the retailer may have had no intention to mislead consumers and used a reference price which had genuinely been in effect, this ASA decision demonstrates that the test of whether ads’ claims are misleading is objective. Retailers must ensure that the information provided to consumers allows them to make an informed transactional decision, including whether to purchase a product. Facts and figures which detract from this, even if “technically true”, will not satisfy this requirement.

Any practical tips?

Retailers should consider the CTSI Guidance when considering what information is advertised about promotions, including:

• ensure advertised savings are genuine, actually given to the customer when it comes to payment, and have not been exaggerated
• ensure products are actually available for the promotional price at which they are advertised
• avoid comparing prices to misleading, false or outdated reference pricing
• ensure relevant caveats and exclusions which apply to promotional pricing are brought to consumers’ attention.