Largely thanks to the internet, consumers are becoming increasingly savvy when it comes to shopping around for the best deal. When it comes to special offers and promotions, this means that there is increased pressure on retailers to come up with the most eye-catching deals. Sometimes this causes retailers to promote special offers that give a false impression as to how good the offer really is.
So, what are the legal risks when this happens? The Advertising Standards Authority (ASA) can intervene and order retailers to stop any misleading promotions. In addition, the ASA works closely with Trading Standards, who can investigate and prosecute independently. Large fines can be imposed, taking into account profits made a result of the misleading special offer. The following types of special offers have been problematic:
Hurry, offer ends soon!
One way of convincing customers to make a snap decision to ‘buy now’ rather than shop around is to make the offer available for a limited period of time. While there is nothing wrong with this, retailers must make sure that the offer really does end when they say it will. For example, if an offer states “50% off scarves: offer ends 31 November”, the sale of those scarves must not be sold for 50% after November 31. The ASA adopts a hard line on this point.
Available while stocks last
A number of retailers have been sanctioned for not having sufficient stock to meet demand for special offers. It is therefore important to make a reasonable estimate of demand before launching any special offers. If for any reason retailers think that demand may outstrip supply, this should be made clear to customers in the initial advertisement.
Retailers should exercise caution when marketing anything as ‘free’. Is it actually misleading to describe the product as free? For example, a product cannot be described as free when the customer has to pay for postage and packaging to receive the goods.
Another risk area is BOGOF-styled offers. For example, if an offer states ‘buy a scarf, get the gloves free!’, the price of the scarf must not have been increased, even slightly, from its original price. Similarly, the quality of the gloves must not have been in any way reduced ahead of the offer.
Fashion retailers should take heed when trying to entice customers with special offers as there are serious consequences not least reputational damage and potentially even costly fines.
- For more information please contact Duncan Reed at TLT LLP on 0333 0060742 duncan.reed@TLTsolicitors.com