Christmas and New Years have come and gone, and now it’s that time of the year in the fashion world again – the post-Christmas sales. Cue the frenzy of bargain-driven shoppers! If you are thinking of running a sale on your products, as many fashion businesses do this time of the year, there are a few things that you should think about before slashing those prices. The last way you’d want to start off the New Year is by inadvertently branding yourself as the fashion business that likes to play pranks – on its consumers, that is.
Don’t risk being seen as unfair or misleading
The Consumer Protection from Unfair Trading Regulations 2008 came from an EU Directive and are designed to protect consumers by putting restrictions on business’ advertising and selling practices. The Regulations contain a general prohibition against unfair commercial practices, that is if it is likely to materially distort the economic behaviour of the average consumer with regard to the product. There are a few specific prohibitions that apply. For example, a commercial practice will be unfair if it is a misleading action, a misleading omission or if it is aggressive.
Then there is the list of shame – a schedule of commercial practices which are in all circumstances considered unfair. The most relevant of these no-go practices that might apply if you decide to run a sale include the following:
- No ‘bait advertising’. If you invite consumers to purchase products at a specific price, you have to disclose any reasonable grounds that you may have for thinking that you will not be able to actually supply those products at that price, for a period of time and in quantities that are reasonable. This element of reasonableness depends on the product, the scale of advertising, and the price offered.
- You cannot ‘bait and switch’. If you invite consumers to purchase products at a specific price, you cannot then refuse to show the advertised item to consumers, refuse to take orders for it, refuse to deliver it within a reasonable time, or demonstrate a defective sample of it, with the intention of promoting a different product.
- You cannot try to convince consumers to make a hasty decision, rather than giving them a real chance to make an informed choice, by stating that the product will only be available for a limited time or on particular terms for a limited time, if this is not really the case.
- You cannot describe a product as ‘gratis’, ‘free’, ‘without charge’ or anything similar if the consumer has to pay anything other than the unavoidable cost of responding to the commercial practice and collecting or paying for delivery of the item.
How much for this one?
In addition, there are certain provisions under the Price Marking Order 2004 which specify the ways in which sales prices should be represented to consumers. Similar to the rationale behind the Consumer Protection from Unfair Trading Regulations, they seek to prevent traders from misleading consumers in respect of prices.
Under the Price Marking Order, the selling price of a product should be "unambiguous, easily identifiable and clearly legible," but it does not prescribe exactly how you should do this. However, it does state that the price must include VAT and all other taxes. Any additional charges for postage, packaging or delivery of the product do not necessary need to be included in the price, but if they are indicated separately, they too should be “unambiguous, easily identifiable and clearly legible.”
Prices do not need to be marked individually. But however the selling price is shown, it has to be available to consumers in such a way that they do not need to ask for assistance from the business in order to find out what it is.
Where the business wants to reduce the price of the products, that is put the products on sale, and these products are already priced in accordance with the Price Marking Order, the business can use a general notice or anything similar that is visible to consumers, stating the products are or may be for sale at a reduction. As you could probably guess by now – the details of the reduction must be “unambiguous, easily identifiable and clearly legible” – and prominently displayed.
The Price Marking Order does not require advertisements to show a selling price, but if you are advertising a sale, you may want to include one so that consumers do not end up disappointed. However, if your advertisement is one that invites consumers to conclude a distance contract (for example mail order advertisements in newspapers and goods sold directly from the Internet or media), rather than one that simply encourages them to go to a retail outlet where prices are displayed, then you do not get the choice, and selling prices are a must. Catalogues do not come within the definition of an advertisement and should always show selling prices.
Advertising – don’t exaggerate, but make it meaningful
The guidelines and requirements of the Committee of Advertising Practice (CAP) Code and other general consumer legislation also apply. These guidelines must be followed and cannot be avoided by, for example, advertising through social media.
Price claims such as “up to” and “from” should not exaggerate the availability or amount of benefits the consumer can really obtain. Advertisers should be able to show a reasonable availability of stock. What is reasonable is the same as asking how long is a piece of string – it depends. But if you want to put a number on it, as a general rule, 10% of the advertised products should be available for purchase at the headline “up to” or “from” price. Within that, a meaningful selection of products should also be available.
This article was written by Charlotte Eliasson, Trainee at Fox Williams and a member of the fashionlaw team. She can be contacted on firstname.lastname@example.org.