Note: This advice is given by the CAP Executive about non-broadcast advertising. It does not constitute legal advice. It does not bind CAP, CAP advisory panels or the Advertising Standards Authority.
The Department for Business, Innovation and Skills has issued the Pricing Practices Guide (www.bis.gov.uk). In it, it states that it is acceptable for marketers to quote Recommended Retail Prices (RRPs) if they are genuine and not significantly different from the price at which the product might be sold. The CAP Code mirrors that requirement and Rule 3.40 states “Comparisons with recommended retail prices (RRPs) are likely to mislead if the RRP differs significantly from the price at which the product or service is generally sold”.
In 2006, the General Media Panel was asked to define the test of what constituted “generally sold”. Although it did not specifically define the test, the Panel considered that the product and sector could play a vital part in reaching a conclusion. It was feasible that large, seldom-bought items such as furniture might be considered “generally sold” if available through a relatively small number of nationwide stores, for example IKEA. In 2006, the ASA accepted that sales in two outlets for a pair of binoculars and ten outlets for hearing aids was adequate to justify that the products were “generally sold” (Express Newspapers plc and BVG-Airflo Group plc, 8 November 2006, and Ultravox Holdings Ltd, 23 August 2006). Marketers should bear in mind that the same number of sales outlets would almost certainly not be enough for other, more frequently-bought products.
The ASA might regard products that are available online as satisfying the “generally sold” principle but the mere inclusion of a product on a seller’s website is not necessarily enough. The ASA has upheld complaints about marketers who have claimed to have offered for sale products that no one has bought (Woods Supplements, 21 June 2007).
In 2008, the ASA ruled that an advertiser that was advertising DVDs before they were on general release should not use RRPs because it could not show the product was generally sold at that price. The use of RRPs for products not yet launched or available only for order is therefore likely to be considered notional and incapable of substantiation until a retail market is established (Play Ltd, 9 April 2008).
Even if they can provide documentary evidence that the quoted RRP was recommended by the manufacturer, marketers should be aware that the ASA has nevertheless upheld complaints because it has not been convinced that the RRP was the price at which the product was sold (Jessop Group Ltd, 14 June 2006). Marketers should avoid stating an “RRP” if the product is sold only by them.
The definition of what constitutes a significantly different price does not seem to have been tested but an adjudication in 2006 considered whether a selling price of £40 satisfied the use of an RRP of £49.95. The ASA concluded that the claim was misleading (Straight plc t/a Blackwall, 1 November 2006).
In 2001, the ASA upheld a complaint about a bedroom furniture retailer that claimed to offer goods at a significant discount. A footnote explained that the offer was based on the list price. Because the advertiser was unable to show that the ''list price'' was anything other than a notional price at which furniture was rarely, if ever, sold, the ASA upheld the complaint (Sharps Bedrooms, 28 March 2001). A similar decision in 2007 suggests that the ASA would continue to apply that logic (Scotford Ltd, t/a Protex Systems, 4 July 2007).
Marketers should remember that prices, whether recommended retail prices or not, should be genuine and not misleading (Advanced Direct Information Services Ltd, 5 May 2004). Marketers should refer to the DTI’s Guidance for Traders on Price Indications.
Last modified : 03 August 2010