“Summer sale: up to 70% off! Get 50% off men’s t-shirts! Hurry, offer ends soon!”
These are just some of the offers shoppers are bombarded with when browsing online. But how accurate are these claims and how tightly are website sales regulated? Who is responsible for enforcing the rules?
It may come as a surprise to retailers that there are extremely strict rules when advertising sales and promotions online. Just because the sale is online doesn’t mean that it is regulated differently from in-store sales. The rules simply state that advertising promotions must be clear and must not mislead consumers.
Both online and in-store promotions are regulated by the Advertising Standards Authority (ASA). In more serious cases the Competition and Markets Authority (CMA) or local trading standards may be involved.
The ASA is only too aware that some online retailers falsely inflate the discounts available to make sales look more appealing. This has the potential to mislead customers and the ASA has upheld complaints against a number of retailers in this area.
With this is mind, retailers need to be particularly careful when using statements, such as ‘up to 70% off’, as the ASA expects retailers to comply with the ‘10% rule’. This means that, for example, in a sale offering ‘up to 50% off sunglasses’, at least 10% of all sunglasses on sale must be discounted by 50%. There should also be a substantial number of other items available at a range of discounts up to the maximum sales discount, in this case 50%.
The word ‘all’ is also tightly regulated by the ASA. For example, by advertising ‘up to 50% off all swimwear’, an online retailer would need to make sure that discounts are available on all swimwear sold on the website. This would include swimwear sold as a part of a package with other items.
It is also important to monitor prices. Retailers are prohibited from selling items at a discounted price for longer than the original sales price. Last year a major UK supermarket was fined for falsely describing strawberries as half price for three months, when in fact they had only been sold at the full price for one week.
The ASA also takes the view that retailers must not promote items as ‘discounted’ until they have been available on general sale for at least 28 days.
What are the risks?
The ASA does not have the power to impose fines, but it can make life very difficult for non-compliant companies. The ASA can work with Google to remove paid-for search adverts or even place notices on search engine results ‘naming and shaming’ companies that do not comply with the rules. However, in more serious cases, the CMA or local trading standards bodies can prosecute and fine companies under consumer protection legislation.
- For more information please contact Duncan Reed on 0333 006 0742 /duncan.reed@TLTsolicitors.com