Prices: Recommended retail prices (RRPs)


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Published
Mar 18th '24
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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 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 ASA is likely to uphold complaints. In an ad for a second hand MINI 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 sold new. 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, meaning an RRP should not be used (Marcandi Ltd t/a Madbid, 22 February 2017). The same conclusion was reached in 2020, when Lidl tried to quote a manufacturer’s RRP for a juicer because the model was no longer on the market (Lidl Great Britain Ltd, 16 December 2020)

 

  • 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).

 

Similarly, Happy Beds explained that other retailers were displaying similar RRPs on their websites to the one displayed in their ad. However, in every case the price was discounted, and none of the retailers were advertising the product for sale at the RRP. As such, Happy Beds were unable to show that the product was generally sold across a number of retailers at the quoted RRP price (Happy Beds Ltd t/a Happy Beds, 14 December 2022)

 

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

In 2006, the Industry Advisory Panel (IAP) made clear that the product and sector could play a vital part when deciding what constituted the ‘generally sold’ price. 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. This is unlikely to be the case for products purchased more frequently.

 

For example, in 2022 the ASA accepted that the RRP quoted in Lidl’s vacuum cleaner ad reflected the price at which the product was generally available across the market, as Lidl showed that price was used by three other online retailers, two of which were also high street retailers. However, in the  same ruling, the ASA determined that pointing to one other online retailer selling at the RRP (as well as the manufacturer’s website) was insufficient to determine the ‘generally sold’ price for a mattress and an iron (Lidl Great Britain Ltd, 13 July 2022).

 

In a different ruling, it was determined that the small number of selective examples used to demonstrate the ‘generally sold’ price, usually comprising the manufacturer’s RRP and one other retailer RRP (at the most), was insufficient when considering the number of other retailers selling the products (Lidl Great Britain Ltd, 16 December 2020)

 

  • Ensure the quoted RRP is not significantly different to the ‘generally sold’ price 

Price comparisons against RRPs are only likely to mislead under ad rules if the RRP quoted differs significantly from the generally sold price. However, what constitutes a significant difference has not been defined. In 2014 the ASA 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 a quoted RRP of £49.99. The ASA noted that these advertised prices deviated from the quoted RRP by between 6% and 40%. These variations were considered significant. Therefore, the price range did not support Mothercare’s assertion that the product was generally sold at or around £49.99 (Mothercare UK Ltd, 23 April 2014).

 

Source: CAP

 

About CAP

The Committee of Advertising Practice (CAP) is the sister organisation of the Advertising Standards Authority (ASA) and is responsible for writing the Advertising Codes.

 

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.

 

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