Prices: Recommended retail prices (RRPs)


INSIGHT
Published
Mar 27th '19
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It is common to see ads promising savings compared to a recommended retail price (RRP). But marketers should be aware that while it is acceptable for them to quote RRPs if they are genuine, such price comparisons are likely to mislead if the RRP differs significantly from the price at which the product or service is generally sold.

 

This article relates specifically to RRP claims. Ads that refer to “list” prices or use reference prices such as “Was £XX” are unlikely to fall under the scope of this guidance. Advertisers using these claims should refer to the Committee of Advertising Practice (CAP) general guidance on pricing and savings claims.

 

Do not use RRPs given by the manufacturer as your only substantiation for savings claims

Even if they can provide documentary evidence that the quoted RRP was recommended by the manufacturer, marketers should be aware that if they cannot demonstrate it was actually sold at this price the Advertising Standards Authority (ASA) is likely to uphold complaints. In an ad for a Mini ONE car on an auction site the advertiser used the RRP which had been set by the manufacturer because that model of car was no longer on the market. The ASA considered that the RRP set by the manufacturer was not the price at which the product was generally sold, and in the case of a product that was no longer on the market, it would not be possible to demonstrate the price at which it was generally sold and an RRP should not be used (Marcandi Ltd t/a Madbid, 22 February 2017).

 

Avoid stating an “RRP” if you are the only seller of the product

If a marketer is the only seller of a product, and so has set the price themselves, it is unlikely to be acceptable to refer to the price as an RRP. If you wish to compare against your own previous selling price, we recommend stating “Was £xx, now £xx” or similar. Claims that a product is “worth” a certain amount could be seen as unclear and referring to either the advertiser’s own previous selling price or an RRP (Money Expert Ltd, 1 October 2014).

 

RRP comparisons should always be against the same product; similar competitor products are not an acceptable alternative. In one investigation the advertiser based a “typical RRP” claim for their bathrooms on the prices of similar competitor products. Because the products themselves were not stocked by any other retailers, the advertiser was unable to demonstrate that the products were “generally sold” at the stated price. The ASA therefore concluded that the RRP claims, and the savings claims on which they were based, were misleading (IJM Enterprises Ltd, 27 May 2015).

 

Do not use RRPs for products that have not yet launched

In 2017, the ASA received a complaint about an auction website which made multiple savings claims and stated an RRP for an Apple Watch. The advertiser provided a pre-launch news article which stated an estimated price range to demonstrate however the ASA rules that a price stated in a pre-launch news item did not demonstrate that the item was generally sold at that price and the complaint was upheld (Blionix Ltd t/a liklebid, 22 February 2017).

 

If marketers wish to offer a new product at a lower price than it will be sold at in the future we recommend they describe it as an “introductory” price or similar.

 

Be aware that advertising a price isn’t the same as selling at that price

Simply offering a product for sale at a stated price is not necessarily enough to use it as a point of comparison. The ASA has upheld complaints about marketers who have claimed to have offered products for sale but were unable to demonstrate that anyone purchased them at that price.

 

In 2013 the ASA upheld a complaint about a promotion that offered a new toothbrush worth £169.99 in exchange for a customer’s old one. The advertiser stated that this price claim was based on the RRP. However the product was sold at only one retailer, and their price data showed that the brush had only been sold at the RRP of £169.99 for 12 weeks, and that in the other 32 weeks it had been sold for £84.99 or less. This demonstrated that the product was not generally sold at its RRP price and the ASA therefore concluded the claim “worth £169.99” was misleading (Colgate-Palmolive (UK) Ltd, 30 October 2013).

 

Be aware that “generally sold” can vary based on product and sector

In 2006, the General Media Panel was asked to define the test of what constituted “generally sold”. Although it did not specifically define the test, the Panel considered that the product and sector could play a vital part in reaching a conclusion. It was feasible that large, seldom-bought items such as furniture might be considered “generally sold” if available through a relatively small number of nationwide stores. The ASA accepted that sales in two outlets for a pair of binoculars and ten outlets for hearing aids was adequate to justify that the products were “generally sold” (Express Newspapers plc and BVG-Airflo Group plc, 8 November 2006, and Ultravox Holdings Ltd, 23 August 2006). Marketers should bear in mind that the same number of sales outlets would almost certainly not be enough for other, more frequently-bought products.

 

The definition of what constitutes a significantly different price has not been specifically defined, but a ruling in 2014 considered whether a screenshot showing the product being sold by other online retailers for £59.99, £49.99 (in two cases), £46.85, £43.99, £39.95, £34.99 and £29.99 justified a savings claim against an RRP, or generally sold, price of £49.99. The conclusion was that the wide range of prices the product was offered for meant that it was not generally sold for £49.99 and the savings claim was therefore misleading (Mothercare UK Ltd, 23 April 2014).

 

Source: 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 Advertising Standards Authority.

 

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