When it’s an introductory offer, of course, as Furniture Village found out to its cost (see the ASA ruling here).
The UK’s largest independent furniture retailer (self-professed) was selling a divan and mattress set for £549. This was stated to be an “introductory offer” measured against what it referred to as an “ASP” (apparently an after sales price) of £1,099.
This was error number one.
The ASA considers a “sale” price to represent a saving against the usual selling price. We all understand the concept. The product has been regularly sold at the same well-established price for a reasonable period of time, but then the price is dropped (woo-hoo) for a short period of time. This blog has considered issues with usual selling prices before (here).
Sofa so good (sorry).
But what if the product is new and has never been sold before? Then, there’s no usual selling price to use as the basis for the saving.
That’s where an “introductory offer” comes to the rescue – there’s no need to look back for a usual selling price that doesn’t exist, rather you just need to establish the usual selling price after the offer period.
The ASA is in principle comfortable with introductory offers, as long as they are not characterised as discounts against the usual selling price. Here, however, Furniture Village wasn't sure what it was offering, referring both to an introductory offer and an after sale price - which implies that the introductory price was in fact a sale price. It can't be both.
The ASA said this was too confusing and the basis of the saving wasn’t clear to customers. Luckily, the befuddled customer was highly likely to be lying down whilst enduring these mental gymnastics.
Error number two was a little unfortunate for the retailer.
They didn’t provide a closing date for the offer. This can often be a problem because the retailer ends an offer before customers can take advantage of it. If only they’d known when it was finishing, they would have rushed out to the shop.
Here, Furniture Village wasn't planning to end the offer anytime soon. However, somewhat confusingly it provided closing dates for other offers that were running at the same time. These other offers only ran for quite short periods of time. Therefore, in the context of the other limited-time offers, the customer felt they had to act very quickly to take advantage of this one, in case it should suddenly end. In reality, the offer ran on for several more weeks, with the price even dipping lower for a short period. The customer felt rushed into making their purchase decision.
Did the ASA agree with the customer? You bedder believe they did.
So what are the morals of this story?
Don’t make up your own terminology – you’re not helping yourself by referring to things like ASPs (which sounds like a shouty snake). Furniture Village even added a footnote explaining what it meant.
Don't mix your sales with your introductory offers. For the ASA, they are a retail paradox.
Include a clear closing date for any offer, so that everyone knows where they stand (or sit).
If you run a sale, make sure it doesn’t last longer than the earlier non-sale period. Otherwise your sale price is just the price.
And if you do run an introductory offer, then (note to self) remember to establish the usual selling price afterwards. Otherwise, once again, the introductory price is just the price.
Because the basis of the savings claim was not clear and because consumers were likely to believe they had to act more quickly than they needed to, we concluded that the ad breached the Code