Perhaps anticipating the reading opportunity offered by this long weekend, CAP released a flurry of guidance notes at the end of last week, covering issues as diverse as gambling, guarantees, envelopes and charity advertising (my colleague Geraint Lloyd-Taylor discusses the gambling guidance here, while Anna Whaley covers charity advertising here).
The update on guarantees caught my eye, as it's an area I've been advising clients on over the last week.
Importantly, the guidance explains how the term "guarantee" can mean different things in different contexts, which is something that is commonly misunderstood. The term is often used interchangeably with the word "warranty" to mean a promise to fix or replace a product if it goes wrong within a specified period. It can also be used in the context of a price promise or a promise that a product will perform in a particular way.
Whilst there's nothing breathtakingly new in the guidance, it's a helpful reminder of the issues that arise and I've pulled out a couple of the key points below:
1. Efficacy claims - don't exaggerate: Absolute performance claims should be treated with some caution. When making bold promises (e.g. "guaranteed results every time!"), the ASA will expect the advertiser to hold robust evidence in support. Often, advertisers can find themselves in trouble where the evidence supports a claim, but just not quite the exact claim being made.
2. Price claims - "lowest price guarantee" vs "lowest price guaranteed": In case you missed it, the difference is the little "d" at the end and it makes a significant different to the claim:
- "Lowest price guaranteed": This means you've taken an active step to set your prices lower than your competitors. The issue with this type of claim is that you'll have to monitor prices across the market and change your claim quickly if it becomes untrue, for example, if your competitors subsequently lower their own prices in response to your pricing.
- "Lowest price guarantee": This is a reactive measure, meaning that you'll beat a competitor's price. This type of claim is easier to manage as it doesn't require active price monitoring, but you'll need to be very clear about what you are offering and on what terms - how long is the offer open? Does it apply to all products? What evidence does the consumer have to present to you? Is the offer limited to bricks and mortar competitors or is it available against online-only competitors?
3. Extended warranty/guarantee claims - be clear about any restrictions: When offering the consumer an extended product warranty/guarantee (i.e. a warranty/guarantee that offers more than the consumer would otherwise be entitled to by law), any terms and conditions that apply must be made very clear - think expiry dates, claims procedures, exclusions, etc. Of course, advertisers also need to ensure that their terms and conditions comply with the law: it is unlawful for the warranty/guarantee to limit or exclude rights that the consumer already has under applicable law or to present a warranty/guarantee in such as way as to falsely suggest that it offers more than the consumer is already legally entitled to.
And finally, it goes without saying that if you're offering a guarantee, you'll of course have to stand by it when consumers come knocking. Failing to do so will often guarantee another, louder knock from the ASA...
... the word ‘guarantee’ can have many different meanings and not all warranties are created equal, so any restrictions or limitations must be clear.