Black Friday - What can you legally say?
Written by Austin Blackburn | Corporate Law | 23rd November 2019
Infamous for its drastic price cuts and brimming with keen shoppers. Shops turning to chaos and online servers crashing from an overload of users. Black Friday has become one of the most controversial shopping events of the year.
Whilst originally an American pre-Christmas sale, it is becoming increasingly popular with businesses all across the UK ranging from large chains to independent boutiques offering ‘big discounts’ on products and even services. So, whether it be clothing, cosmetics, household appliances, holidays or services you have on offer, you may want to consider joining in the Black Friday hype!
The big question is, how can you take part and how can you make sure you do it right? Whilst some retailers are offering genuine deals, there are others who aren’t in fact offering customers the bargain they claim to be offering. Recent findings from product price comparison website Idealo has revealed that a large proportion of items on ‘sale’ are in fact cheaper before and after Black Friday.
What are the rules?
If you decide to have a ‘sale’ then it is worth reviewing the rules and making sure you are on the right side of them. The Advertising Standards Authority (ASA) has recently set out new guidance to make sure retailers get their promotions right. This guidance applies to all non-broadcast marketing communications, from traditional print advertisements in newspapers or leaflets to online advertisements, e-mails or advertorials.
Four type of advertising claims are covered by the guidance and it highlights the potential pitfalls to be aware of when making such claims.
Misleading claims
“10% off everything*” *Subject to terms and conditions. Be genuine, if the offer does not apply to absolutely everything then don’t claim that it does. Even a line stating that certain products/goods are excluded in a footnote or in your small print can be misleading. Make sure the headline message is accurate and a fair representation of what you are actually offering.
Saving claims
“Was £1,000, now £750” If you are claiming a certain amount of money has been saved then it has to be genuine, accurate and cannot be exaggerated! In deciding what figures to use, you need to consider pricing history and sales data.
The “was” price should be the normal selling price and should have been consistently charged over a reasonable period (no, a day or even a week is not a reasonable period!). Otherwise you are at risk of misleading consumers.
‘Up to’ pricing claims
Up to 50% off everything Any such claims must be a true representation of the price promotion. Therefore, a significant proportion of items in the sale must be discounted to the maximum saving advertised.
To avoid misleading customers you should also make sure you’ve given consideration to the distribution of sale items across different pricing brackets. For example, if you place a significant proportion of items with the lowest starting price in the maximum saving bracket then this is likely to be seen as misleading. For example, a Black Friday sale offering ‘up to 70% off’ on just 10% of the products on sale would be seen as misleading.
Availability claims
“Subject to availability” We would always hope that any sale or promotion is a success and goods/services will be in high demand. However, it is important that you estimate the likely consumer demand before running a promotion to avoid disappointing them. If during your promotion you foresee that the estimated demand can no longer be met then you should make this clear to customers in a timely manner.
The words “subject to availability” is not always sufficient so it is important to consider how you might communicate with customers when stock is limited. For example, if you are selling online, then it would be sensible to update customers through the same online mechanism.
Make your sales safe
So long as you stick by the rules then you should be safe. But do note that the ASA has the power to require retailers to amend or withdraw an advertisement that breaks the rules set out in its CAP Code. The ASA can go even further by featuring the name and details of the problem with the advertisement on a dedicated section of the website which has been designed to appear in search engine results when a consumer searches for a retailer’s website – a risk of reputational damage for sure! Examples can be seen via the following link and they are updated weekly.
Summary
Be mindful and make sure that your promotions are well prepared, honest and compliant with the principles of fair competition.
Speak to a Commercial Solicitor
We’d be glad to talk to you more about the agreements you have, or those that you need in place. Please contact Austin Blackburn on 01752 827125 or email him at ablackburn@nash.co.uk
