Pricing claims, including discount claims, must be clear and fair, and must not mislead consumers. That is the position under consumer protection legislation and the UK's advertising codes (CAP non-broadcast Code and BCAP broadcast Code). Was/now claims are common, for example, when retailer says that an item was £7.99 and now costs £3.99. These can mislead by omission, if for example the item was only sold at £7.99 for a very short period of time or only a long time ago.
In August 2024, the Competition & Markets Authority (CMA) issued guidance on reference pricing for online sellers of mattresses (although it has wider application). It says that when a was/now claim is made:
- the higher 'was' price needs to apply for as long as (or longer than) the 'now' price; and
- there must have been a "sufficient number" of sales at the higher "was" price over a sufficient period on the same website immediately before the discount begins.
The guidance was quite controversial. Emma Sleep rejected the CMA's interpretation of the law, and we're waiting for the courts to decide.
Things that go bump in the night
However, in the meantime, the ASA has ruled in a case involving another mattress supplier called Origin Sleep. It published a claim which stated, "HALLOWEEN SALE up to 45% OFF". Text under the "Origin Hybrid Pro Mattress" listing stated, "Up to 45% off", under which the sale price "from £529.00" was shown, followed by the original price of £961.00 with a line crossed through. Text under the "Origin Hybrid Mattress" listing stated, "Best Value 40% off", above which the original price of £579.00 was shown with a line crossed through, followed by the sale price of £349.00.
Simba Sleep complained to the ASA (Simba also attracted attention from the CMA, but agreed to undertakings). It challenged whether the reference prices and associated savings claims made for the "Halloween Sale" were misleading.
Decision
The ASA upheld the complaint, although it dealt with another two issues with the website informally.
It considered that consumers would understand that the struck-through prices were the prices at which the mattresses were usually sold at the time the ad appeared, and that the lower prices represented savings against those prices. It also considered that consumers would understand from the claims "Up to 45% off" and "Best Value 40% off" that they would be able to achieve a genuine saving of up to 45% and 40% against the usual selling price of the Hybrid Pro and Hybrid Mattress respectively.
Origin Mattress didn't give the ASA the pricing history for the products. Consequently, the ASA could not determine whether the referenced higher prices were the usual selling prices. Therefore, the reference prices and savings claims had not been substantiated.
Origin Mattress had made changes to their website to replace the struck-through reference prices with a "Similar Brands Avg Price". It calculated the price from working out the average selling prices of three products that Origin Mattress considered to be similar and was not the usual selling price of the product itself. Because the ASA considered consumers would understand savings claims as part of a sale, such as "45% off site-wide", to represent genuine savings against the usual selling prices, it considered that the changes were unlikely to comply with the CAP Code when the "Similar Brands Avg Price" was used as the basis for the savings claims as part of a sale.
You've made your bed...
Because the ASA had not seen evidence that the savings claims represented a genuine saving against the usual selling prices of the products, it concluded that the saving claims in the ad were misleading.
How to sleep better at night
As we've said before, the CMA now has significantly beefed-up enforcement powers and is no doubt watching trends in ASA rulings to inform its own enforcement work.
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