As well as the general rules on product availability in Section 3, of the Committee of Advertising Practice (CAP code specifically deal with availability when it comes to promotions.
In 2015 the rules on availability were changed. Previously, promoters had to make a reasonable estimate of demand and show they could meet it. Since May 2015, promoters who cannot meet the likely response may continue with the promotion, provided consumers are given clear information regarding availability. This means:
Promoters must make a reasonable estimate of the likely response and be able to demonstrate they have done so. In addition, promoters must show they were capable of meeting that response or that consumers were given appropriate information regarding availability to decide whether participate.
It remains the case that stating “subject to availability” is unlikely to be sufficient.
Learnings from previous Advertising Standards Authority (ASA) rulings on how to estimate demand still apply (please note though that examples given pre 2015 will refer to rule 8.9 where it would now be rule 8.10).
Demonstrate a reasonable estimate of demand has been made
Promoters need to be able to show that they have made a reasonable estimate of demand for a promotional item. Simply stating the number of promotional items without having done an estimate of demand is unlikely to be considered acceptable.
The right way to estimate demand will depend on the structure of the promotion, but a good place to start may be the response to previous similar promotions. Broadly, promoters should base estimates of demand on a promotion that had a similar mechanic and had a promotional item of similar value or desirability.
The ASA has upheld complaints against promoters who based response rates on different products or those of a significantly different value and generally, if a product on promotion or the savings made are of a higher value than a previous promotion, it may not be suitable to make a direct comparison when estimating demand.
Advertisers should also consider whether there are other factors that could have an impact on demand, for example the popularity of different products at different times of year. The ASA felt that an ASDA had made a reasonable estimate of demand for an Easter promotion on salmon because, along with other factors, they had acknowledged the different time of year when estimating demand based on a previous promotion which ran at Christmas. (ASDA Stores Ltd t/a ASDA, 24 June 2015). Demand at the point that a reward programme is ending is likely to be different than the demand during the life of the scheme (Unilever UK Ltd t/a PG Tips, 2 March 2016).
The level of publicity the promoter generates for the offer can also be relevant. In a Colgate ruling, a previous unadvertised promotion had led to 950 items being claimed, so the ASA considered that 750 items would be inappropriate where the promotion had been advertised on the front page of a newspaper (Colgate-Palmolive (UK) Ltd, 30 October 2013). In 2017, the ASA upheld a complaint about an ad on the front page of the Daily Mail for a free jar of marmite, because the advertiser had not demonstrated a reasonable estimate and had not taken into consideration that there had been some publicity around the product on promotion, which was likely to affect demand (Associated Newspapers Ltd t/a Daily Mail, 07 June 2017).
Changes in the stores or methods of distribution may also have an impact. The ASA ruled against a promotion which ran in Superdrug stores offering a free hair towel with certain purchases. Superdrug based the estimate on a similar promotion which they had run the year previously, and explained that they had increased the number of free products ordered in that previous promotion to account for a larger number of stores taking part. Whilst the ASA acknowledged this increase, they noted that there was a 40% increase in the number of stores taking part and considered that the increase in orders from 5,566 units to 7,000 units was not a reasonable increase relative to this. They had also not been provided with evidence to demonstrate that they had made a reasonable estimate of demand on the previous promotion and upheld the case on the grounds that Superdrug has not demonstrated a reasonable estimate of demand for this promotion (Superdrug Stores plc, 14 November 2018).
The ASA is aware that unexpected positive publicity can have a significant increase in take up. In cases where a reasonable estimate has been made but demand increased because of an external factor (such as spontaneous inclusion in a TV programme) then the value of the estimate will not be negated. However, promoters should be aware of the fact that desirable promotions may well be shared on social media and should consider this as a potential impact when estimating demand (and planning the promotion more generally). If advertisers cannot supply demand due to an unexpectedly high response, they should ensure timely communication with consumers
The ASA has ruled in favour of the promoter where the promoter has been able to show that they made a reasonable estimate of demand and were capable of meeting it, including when an individual was unable to redeem the promotional item (Associated Newspapers Ltd t/a Daily Mail, 11 November 2015) or even in circumstances where demand exceeded supply overall (Kellogg Marketing and Sales Company (UK) Ltd, 5 February 2014).
Provide appropriate information if demand cannot be met
If, having a made a reasonable estimate of demand, promoters know they will not be able to meet it the Code requires that sufficient information, presented clearly and in a timely fashion is provided to so that consumers can make an informed decision on whether or not to participate.
The ASA ruled against a hotel website which continued to feature hotels which no longer had availability as part of the promotion but were still advertising availability and allowing selection of the menu without further information (VUR Village Trading No 1 Ltd t/a Village Hotels, 27 April 2016).
Appropriate information includes any limitation on availability and the likely demand. As a starting point, promoters might want to be specific about the stock of the promotional good, for example “5000 free bags to give away” or “free bag for the first 500 callers”.
In addition, promoters must not encourage the consumer to make a purchase or series of purchases to claim promotional items if the number of those items is limited, unless the limitation is made sufficiently clear at each stage for the consumer accurately to assess whether participation is worthwhile (Rule 8.12).
We would expect that a signpost to where people can check availability is likely to be considered necessary in some circumstances, especially when it comes to promotions which require a series of purchases or long running promotions. Promoters should not actively market promotions where they know that the promotional items have run out, as this is likely to be considered misleading. Promoters should ensure that they act immediately to stop advertising the offer when stocks of the promotional item are gone. Media in which text can be changed immediately (for example, the Internet) or that has short lead times (for example, the national press) are preferable to media that cannot be changed quickly or easily.
Rule 8.13 states that if “a prize promotion is widely advertised, the promoter must ensure the widespread availability of the requisite forms and any goods needed to establish proof of purchase”.
Please note that if the number of promotional items is particularly low compared to likely demand, promoters might like to consider whether a prize draw might be more appropriate.
Ensure timely communication in the event of an unexpectedly high response
Code rule 8.11 states that if an advertiser has made a reasonable estimate, and expects to meet the demand but cannot due to an unexpectedly high response, they must ensure timely communication with consumers and in the case of detriment, offer a refund or reasonable substitute.
The ASA part upheld a complaint about an ad for a promotion on Lidl prosecco because, whilst Lidl did demonstrate that they had made a reasonable estimate of demand, they were unable to supply enough units to meet demand due to an unexpectedly high response and breached the Code because they did not effectively communicate this information to consumers in a timely manner (Lidl UK GmbH, 04 April 2018).
Don’t rely on “subject to availability”
Merely including a statement along the lines of “subject to availability” is not enough to relieve promoters of their obligations to avoid disappointing participants (Rule 8.9) as the rulings referred to above often show.
One sector that generates a lot of complaints about the availability of promotional offers is the travel industry.
Be aware of the position regarding prizes
The rules on estimating demand do not apply to prizes, which must be awarded. If the original prize is unavailable, a reasonable equivalent must be offered (rule 8.15.1) and there can be no cost to claim the prize (rule 8.21.1).
If the prize originally offered cannot be awarded then a reasonable equivalent must be awarded. If a concert is cancelled, it’s reasonable to arrange tickets for a different date or discuss with the winner an appropriate alternative. Advertising a prize as a family holiday from a variety of airports and instead providing flights from only one airport is unacceptable (British Midland Regional Ltd 20 August 2014).
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 Advice Online entries provide guidance on interpreting the UK Code of Non-broadcast Advertising and Direct & Promotional Marketing.
How can we help!
At LS Consultancy, we provide a cost-effective and timely pre-publication advice to make sure all your advertising and campaigns are compliant, clear and suitable for their purpose.