Price comparisons are a fast way to communicate value to consumers or stand out amongst competitors. It is important that any comparisons used in ads are based on correct and verifiable information, and do not mislead consumers. Here are a few areas to consider:
- When and for how long was the item sold at the reference price?
Pricing history will affect the claims that you can make in your advertising, whether you’re referencing a previous price or an RRP.
An ad for a necklace was ruled as misleading because it had not been sold at the stated reference price for at least 12 months prior to the ad. Similarly, an item only sold at the stated reference price for three days was not considered adequate in an Advertising Standards Authority (ASA) investigation.
- Have you sold many items at the reference price?
The number of units sold at the reference price is also important to consider. An investigation into a laptop ad found that only seven were sold at the reference price compared with the 74 sold at the ‘discounted’ price. The ASA considered this did not adequately support the higher price as a realistic selling price.
- No pricing history?
Advertising discounts on new products can be problematic when there is no pricing history to compare against. If it is an “introductory price,” make this clear and ensure that the price in increased after this period.
The ASA ruled that a fast fashion retailer mislead consumers by advertising a collection at “50% off” despite having never been sold before. Similarly, if you are the only seller of a product or if the product has not yet launched then you should not state an RRP price.
- Comparing with competitors
It is important that comparisons are made between products meeting the same need or intended for the same purpose and that comparisons are fair and presented clearly. Unless clearly stated otherwise, you should ensure you only compare prices that apply to the same sales channel (online prices vs. online prices, in-store vs. in-store etc.).
With ‘basket of goods’ comparisons the ASA has ruled that there needs to be a fair selection of cheaper own brand and higher-priced branded products. It is also important that the bulk of the saving is not from one significantly cheaper item.
For more information check out this guidance on promotional savings claims.
Source: Committee of Advertising Practice (CAP)
Note: This advice is given by the CAP Executive about non-broadcast advertising. It does not constitute legal advice. It does not bind CAP, CAP advisory panels or the ASA. CAP’s AdviceOnline entries provide guidance on interpreting the UK Code of Non-broadcast Advertising and Direct & Promotional Marketing.
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