“Up to 50% off” Carpetright saving claim deemed misleading by ASA

What does the ASA’s recent ruling on Carpetright’s banner ads tell us about its approach to “up to” or “from” price promotions?

The key takeaway

Traders need to take care when using “from” or “up to” pricing announcements in a promotion. A significant proportion of the products in the promotion must benefit from that maximum saving and the discounted product must have a sufficiently established prior price. In this ruling, the ASA ruled that eight Carpetright banner ads claiming that certain products were up to 50% or 20% off were misleading because they exaggerated the amount that customers would likely save.

The background

In January and February 2022, Carpetright launched a campaign promoting discounts on a range of products. All the ads were a variation of the following information: “Up to 50% off a choice of floors and beds + extra 20% off a huge range of floors when you buy underlay”.

Two rival companies challenged whether these savings claims were misleading because they understood that only a small proportion of products were available at these maximum discounts, and that the products which were discounted had never actually been sold at the stated higher, undiscounted price.

The ASA ruling

As part of its investigation, the ASA first considered how consumers would interpret the ads. They determined that consumers would draw the following key conclusions:

• that a significant proportion of the products would be discounted “up to” the amounts stated
• that the maximum discounts referred to would be spread across the different price ranges of products, and
• that the higher undiscounted prices were the genuine original prices.

Carpetright provided the ASA with price and sales data divided into three categories: beds, hard flooring and soft flooring. The ASA reviewed the data provided by Carpetright and considered the pricing history as well as which savings claims were made in relation to which products or product categories at the various stages of the 10 week long promotion. They noted that the figures Carpetright referred to showed the percentage of product lines discounted, rather than the percentage of product lines that were discounted by the maximum possible percentage.

The ASA considered that the use of the maximum discount in the ads (50% and 20%) was misleading because that maximum discount had not been applied to a significant proportion of the products and maximum discounts were not evenly distributed across different price ranges of products. For example, for hard flooring only 2-8% of the product lines were discounted by the maximum amount. 

In deciding whether the advertised savings were genuine savings, the ASA considered whether the higher undiscounted prices were the usual selling price, and took three key principles into account. Firstly, the Chartered Trading Standards Institute’s Guidance for Traders on Pricing Practices states that savings are more likely to be considered genuine if the discounted price is used for a period of time which is the same or shorter than the period of time that the reference price is used. In this case, although Carpetright had a policy of ensuring that over a rolling 52 week period, no product was discounted more than 26 weeks, from the six months’ sales data provided “there were certain products that had been discounted for more than half that time and so at that particular point in time, those products had been at the discounted price for longer than they had been at the higher price”. Secondly, Carpetright used a pricing model whereby products were given essentially two prices over the year. The ASA concluded that rather than one being the genuine price and the other being a discounted price, the product had two prices and consumers who were aware of the pattern would know that neither was the usual selling price. The final relevant factor was the volume of sales at the higher price. Here, the ASA pointed to the fact that a large proportion of beds had not been sold at their higher price because consumers knew that they would be discounted in the future.

The ASA found that the ads were misleading because consumers would understand that a significant proportion of products would be discounted by the “up to” amounts, when they were not, and the advertised savings were not against a genuine usual selling price.

Why is this important?

This decision highlights the care that must be taken with a common promotional technique, namely “up to X% off” and how this can become misleading. In this case, it was not enough for Carpetright to show that some of its product lines were discounted by the maximum amount of the discount (50% or 20%). The maximum discount had to be across a significant proportion of products and across the various categories of products which were advertised. The ruling also serves as useful reminder to advertisers of the importance of genuine price establishment and that juggling with prices may result in consumers being misled.

Any practical tips?

Retailers should ensure that when the term “up to” is used in a sale advert, they need to be able to show that a significant proportion of products (with a good distribution across product categories and price ranges) have the maximum saving. They must also be able to demonstrate that a genuine usual selling price has been established to ensure that any discount represents a genuine saving for the consumer. 

Spring 2023