Advertising, Marketing & PR

Promoting Special Offers

You may also like to look at:

• Online marketing and e-commerce regulations
• Pricing and charging

Promoting special offers

Offering reduced prices, free items, introductory and seasonal offers, or added value can be a great way to attract new business and win new customers (or get some old ones back).  However, there are a number of rules around the pricing and promotion of offers that you need to be aware of.

Rules relating to special offers

No one piece of legislation covers the rules around special offers.  Instead, a number of acts -  the Consumer Protection from Unfair Trading Regulations 2008, Price Marking Order 2004, Consumer Protection (Distance Selling) Regulations 2000, the Travel Package Regulations etc - affect the pricing and promotion of offers, and they are all trying to do the same things:

• Avoid misleading the customer
• Avoid inappropriate comparisons of price
• Avoid unfairness

As this extract from the Advertising Code says,

The following topics are covered:

• Free offers, including 2 for 1 etc
• Promoting the claim to lowest price
• Marketing to mobiles
• Promotions with prizes (eg competitions, draws etc)
• Ticket promotions
• Price reductions and sales
• Introductory offers
• Accommodation offers
• Prices which become misleading and prices over time

Free (or any term like complimentary or gratis that implies free)

• Free must mean free; 2 for the price of 1 etc must mean one is completely free.  In other words, there must be no hidden charges and any costs which are mandatory must be included free.
• In order for it to be classed as free, the consumer can pay no more than:
  • The minimum cost of responding to the offer by phone (up to the national call rate but not at any premium rates), normal not premium rate SMS, normal rate post etc
  • The actual cost of delivery, but not any handling or packing fees
  • The cost of travelling (and any incidental expenses) to collect the offer
• The free item can be conditional on another purchase, but you must be absolutely clear about what a person must spend and buy in order to get the free item
• The free item must be genuinely separate from the paid for item, ie capable of being sold alone
• You cannot inflate the price of the item that must be bought in order to get the free item
• You cannot reduce the quality of the paid-for or free item
• If the free item is part of a package, the package must be at a cheaper price than if the item was not free
• You cannot charge someone less if they don’t take the free item

Full CAP guidelines on this topic http://www.cap.org.uk/NR/rdonlyres/F0E69FAA-AAD6-402B-A390-5001C41FF4FE/0/use_of_free.pdf

Promoting the 'lowest price'

It is recommended that you talk to Trading Standards if you want to use the ‘lowest price’ claim in your marketing as the rules, the main ones of which are below, are complicated:

• If you claim to have the lowest price, you must be able to back up the claim
• You must be able to prove that you have the lowest price, not just that you match any competitor
• If your claim to the lowest price is based on competitor price monitoring, the monitoring must take place as close as possible to the advertising date
• If based on monitoring that takes places on a specific date then you must publish the date
• If the advert takes place in a publication with a long shelf life, you must continue the monitoring and continue to keep your prices lower
• Just offering to beat a competitor's price (if asked) is not a sufficient justification for a lowest price claim - this is an offer to beat prices 

Full CAP guidelines on this topic http://www.cap.org.uk/NR/rdonlyres/CD04E458-74B9-4A87-A974-6D94130A8B72/0/Lowest_Price_PricePromises.pdf

Marketing to mobiles

• Marketing by SMS, MMS or similar is permitted, provided you have the explicit consent to market to the consumer's mobile
• You can market without explicit consent to a customer whose details you obtained when they enquired about goods and services from you, or who bought from you, but you must give them an opt-out option (not at premium rates, normal rates only) every time you send them a message
• You can send one message to someone whose details you obtained through some other means than a sale or enquiry (eg a competition or survey) asking them if you can send them marketing messages in the future.  If they fail to respond you must treat that as an unsubscribe.
• You must deal with all requests to unsubscribe as soon as possible
• You must make sure that the message is suitable for the audience
• You cannot market to children unless you have their parent’s explicit consent

For full CAP guidelines on this topic go to http://www.cap.org.uk/NR/rdonlyres/4F784FF1-6405-47EF-A9B0-7061176E960C/0/mobile_marketing.pdf

Promotions with prizes (eg competitions, prize draws, instant wins, lotteries)

There are a lot of regulations applying to promotions with prizes.  These are the main ones:

• All promotions with prizes must be conducted fairly and equitably
• You must not conduct a promotion in a way that would cause undue disappointment
• A competition must be competitive, ie there must be some skill involved in the winning, such as answering a question and completing a tie breaker. If there is no skill and winners are picked at random it is not a competition, but a lottery. 
• If you charge more for an item because it offers the chance to enter a promotion with a prize that is awarded by luck, or if that item is of inferior quality to a non-promotional item this can be seen under law as a lottery for which there is a charge to enter
• It is illegal to charge for entry to a lottery unless licensed to do so (eg the National Lottery).  Therefore, if there is no element of skill in your competition or prize promotion, it must be free to enter (or just the minimum unavoidable cost of entry such as a stamp, non-premium phonecall or non-premium text).  If entry is by purchasing something at higher than the normal price, you must also make a no-purchase necessary route available to consumers, eg by offering to open an instant-win packet if they apply by post.
• You must use plain English when describing a promotion
• You must state accurately and unambiguously all rules, terms, conditions and qualifying criteria of the promotion
• It must be obvious how to enter a promotion, what is required, how winners are decided and how to claim a prize
• You cannot apply unreasonable conditions
• You must make the prizes clear, and not imply, by listing them together, that prizes of inferior value or quality are similar to prizes of superior value or quality
• You must state closing dates clearly
• The closing date must not be unreasonable
• You must state your full name and contact details alongside any promotion
• You must not misrepresent the chances of winning or imply that someone is or could be a winner when they are not or could not
• If you intend to use entrants' details for marketing purposes you must provide an opt-in option

There are many more detailed rules around competition, but these are the main ones.  For full CAP guidelines see:  http://www.cap.org.uk/NR/rdonlyres/EFD609AD-1735-45CF-A3D8-F0B55437DE28/0/PromotionsWithPrizesHelpNote.pdf

Tickets

• When promoting tickets, you must quote inclusive ticket prices (inclusive means inclusive of any mandatory extra charges or booking fees)
• Quote from or from and to (inclusive) prices if there are a range of prices
• For the sake of clarity, if there are different adult and child prices, state whether you are quoting the adult or child price

See BERR's guide to Pricing for Traders for more: http://www.berr.gov.uk/files/file46254.pdf

Price reductions and sales

• When you advertise a reduced price, you are effectively comparing your ‘sale’ price with your own previous price, ie making a comparison.  You must make sure that you always compare strictly like for like.
• If you advertise a reduced price, you must also display the price it was reduced from
• The price it was reduced from does not have to be the last price, if you have offered a series of reductions over a short space of time.  To be safe, show the original, reduced and further reduced prices
• The price it was reduced from does have to be a genuine selling price, at which the item was genuinely available for sale for a reasonable length of time, usually at least 28 consecutive days in the last six months
• If you are comparing an historical price (eg compared to last season's price) you must state the period (eg last season, last year, 2007 prices etc)
• For items where the price changes over time, the reduced from price must be the genuine price at which this item would be sold at the time when the offer is available
• If you show 10% off, 25% off etc, the discount must genuinely be this percentage of the inclusive price
• The inclusive price is the price of the item plus any extra mandatory charges
• If your price reduction is due to buying through a certain channel, eg buying online, you must specify this, eg, “discount for buying online”
• In order to offer a discount at a specific outlet or channel, exactly the same item must be available from another outlet or channel at a higher price and you should state which channel the discount compares to eg "compared to our shop price”
• In all cases, the offer must last for at least as long as the publication is available (ie a week in a weekly, most of a month in a monthly etc).  If not, the closing date should be published.
• The offer must not be unreasonably limited availability
• Advertising such as “Half price sale” or “up to 30% off” should not be used unless at least 10% of your total stock is available for purchase at the highest discount.  If this isn’t the case, then say “Some rooms at 50% off” or “Selected tickets up to 30% off”.

See BERR's guide to Pricing for Traders for more: http://www.berr.gov.uk/files/file46254.pdf

Introductory offers

• You cannot call something an introductory offer if you don’t intend to sell it for a higher price (at the same outlet or channel) after the offer has ended
• You must not make the offer period so long that it becomes misleading to call it introductory
• You must show the end date of the offer
• If you decide to extend the date of the offer, you must make it clear that you have extended the date (it is against the law to encourage people to make a quick decision on something because you imply the availability of the product or the offer is more limited than it actually is)
• When you quote a future price, you must intend to offer exactly the same item for sale at the same outlet or channel at that price for a reasonable period immediately after the offer.  A reasonable period depends on the item but is usually a period of 28 consecutive days within 3 months after the offer

See BERR's guide to Pricing for Traders for more: http://www.berr.gov.uk/files/file46254.pdf

Accommodation offers

• If you advertise accommodation at a special rate you must make it clear what the board, accommodation type and date range is that qualifies for the offer.  You must include any non-optional charges in the advertised price (ie no hidden extras).
• You must make any important qualifying information clear (eg you must book a 3 night break, you must book before 15th April, school holidays not included etc)
• If you advertise accommodation plus anything else, eg travel or an activity, at a special price you should be aware that this becomes a travel package and is therefore governed by the Travel Package Regulations
  

Prices which become misleading and prices over time

• You must take every care not to let your advertised prices become misleading
• Prices advertised in places that can easily be changed - like a website, window, banner, stand etc -  must be removed as soon as they are no longer applicable
• Prices in publications must stay valid for a reasonable time – eg at least a few days in a newspaper, most of a week in a weekly magazine, most of a month in a monthly and should anyway display the offer closing date
• If prices do change, you must inform customers before they are committed to buy

See BERR's guide to Pricing for Traders for more: http://www.berr.gov.uk/files/file46254.pdf

Further help

You can get further advice from:

• www.berr.gov.uk  (BERR, formerly the DTI)          
• www.asa.org.uk    (Advertising Standards Agency)
• www.cap.org.uk    (Committee of Advertising Practice)
• www.tradingstandards.gov.uk  (Trading Standards Central)

You might also like to look at:

• Online marketing and e-commerce regulations
• Pricing and charging