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.
Marketers wanting to make claims about the relative cost of their product should ensure that they either compare their product with their competitors’ most comparable product or state clearly that differences between the products exist. Comparative claims are permitted and, if comparing with identified competitors or their products, marketers should compare products meeting the same need or intended for the same purpose. Marketers may objectively compare one or more material, relevant, verifiable and representative feature of competitor products and that includes price (Rules 3.33, 3.34 and 3.35).
Savings claims are common for marketers of products such as insurance and, because an insurance package can often consist of several components (price, extent of cover, excess, etc), marketers might have to select carefully the competitors they compare themselves with. Factors like location (for home insurance) and make and model of car (for car insurance) might make significant differences to the price of insurance products and any savings claims quoted should, as far as possible, be representative. The ASA is likely to uphold complaints about headline savings claims if they are atypical and exaggerate the savings most consumers are likely to achieve (Royal & Sun Alliance Insurance, September 1999, and Churchill Insurance Company Ltd, 23 October 2002 and 22 January 2003). Generally speaking, both the ASA and CAP would expect that around 10% of customers can or have achieved the maximum claimed savings.
CAP and the ASA distinguishes between claims that imply everyone will definitely save, e.g. “Save up to £X”, “you will save” or “Guaranteed Savings” (Berry Birch & Noble Insurance Brokers Ltd, 7 May 2003) and claims that imply that readers might save, e.g. “You could save up to £X” (Hastings Insurance Services Ltd, 22 September 2004). Both CAP and the ASA differentiate between claims that customers ‘could’ save and ‘can save’. ‘Could’ is regarded as being conditional whereas ‘can’ implies a stronger probability that savings will be attained. Marketers might want to give other hints in the ad that not everyone will make savings, e.g. “Could we give you a cheaper quote?” or similar.
Marketers who make claims such as “save up to 30% on all fridges” would be expected to sell all fridges at a discount with around 10% of models attracting the maximum savings. The ASA regards the claim “save up to 30% on fridges” in a similar vein and would expect all models to have some discount with around 10% having the maximum discount. If only certain fridges are reduced, marketers should make clear that the savings claims relate to selected lines only, for example “Save 30% on selected fridges”. Marketers should neither include that explanatory statement in smallprint nor limit the number of discounted lines so much that the savings claim is misleading.
Marketers who base savings claims on customers who have saved should make clear the basis of calculation. It would be reasonable to assume that only those customers who saved money would, for example, switch from one insurer to another. Marketers must not, therefore, imply everyone will save or that a savings claim is based on all enquirers. Claims such as “last month new customers saved an average of £x by switching to Cheapquote Ltd” are likely to be acceptable but claims such as “Phone us and save an average of £x” are not.
Many marketers make more general savings claims by claiming to offer the ‘best’ or ‘lowest’ prices. Such superiority claims should be backed by robust evidence that the marketer will beat, not merely match, the competitor prices. Comparative evidence should be relevant and timely. It is not acceptable, for example, to monitor a competitor’s pricing in a Newcastle store if the competitor has a regional pricing policy and the ad is intended for customers in London. Similarly, marketers using price comparisons, especially those in the FMCG sector, or if they know their competitors respond quickly to price changes, should use media with a short shelf life and ensure the data is compiled as close to the date of the ad appearing as possible. In those markets in which price retaliation occurs quickly, marketers might want to consider whether they should advertise comparative prices at all.
Marketers should distinguish between claims such as “lowest price guaranteed” (whereby they will offer the lowest prices in all but very exceptional circumstances) and “lowest price guarantee” (whereby marketers provide a low price and offer a guarantee to refund or beat the difference if they are not the cheapest).
See also entry on ‘Comparisons’ and ‘Prices’ and Help Note on Lowest Price Claims and Price Promises.
Last modified : 05 August 2010