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.
Rules 8.9 - 8.13 outline the Code’s specific requirements on availability and sales promotions (please see rules 3.27 to 3.32 for the general requirements regarding availability).
Promoters need to be able to show that they have made a reasonable estimate of demand for, and can supply, the promotional good (Rule 8.9). Usually, that is based on the response rate to previous promotions for similar products. The ASA has upheld complaints against promoters who based response rates on different products or those of significantly different value.
If they advertise heavily discounted prices, promoters will either need to state prominently that the number of promotional goods is extremely limited (for example, “Hurry! Last few widgets left”) or have to be able to show that they have enough stock to satisfy demand. Merely including a statement along the lines of “subject to availability” is not enough to relieve promoters of their obligations to avoid disappointing participants (Rule 8.10).
The Availability Rules of the Sales Promotions section do not preclude promoters from promoting an offer when stocks are extremely limited but they should firstly make sure that it is absolutely clear to consumers that stocks are restricted. Promoters might want to be specific about the stock of the promotional good, for example “5000 free bags to give away” or “free bag for the first 500 callers”. And promoters should ensure that they act immediately to stop advertising the offer when stocks of the promotional item are gone. Media in which text can be changed immediately (for example, the Internet) or that has short lead times (for example, the national press) are preferable to media that cannot be changed quickly or easily.
In 2008, the ASA upheld a complaint about an e-mail promotion that gave away a gift, worth £79.99 with every new magazine subscription. Despite the promoter stating that stocks of the promotional item were limited, the ASA upheld complaints because the promoter had neither made a reasonable estimate of demand nor tried to avoid consumer disappointment (Bauer Active Ltd, 13 August 2008). The promoter should have used a more comparable item to estimate demand, should have offered a substitute product of equal or greater value (instead of merely telling consumers they could cancel their subscription) and should have amended or stopped the e-mail advertising the offer as soon as it knew stocks had run out. Promoters should remember that they should not encourage consumers to buy as a precondition to applying for promotional items or if the number of those items is limited (Rule 8.11).
If they are unable to satisfy demand, promoters should offer refunds or substitute products (Rules 8.12 and 9.4). Despite being satisfied that a promoter made a reasonable estimabe of demand, the ASA upheld a complaint because customers did not automatically receive a substitute product (a discount) when the original promotional product ran out (Kaleidoscope Ltd, 1 April 2009). Even if a promoter can show that the substitute good is of equivalent value to the advertised promotional gift, the ASA could nevertheless receive complaints from recipients disappointed with their gifts (Damartex UK Ltd, 24 September 2008, 23 April 2008 and 3 January 2007, and Dennis Publishing Ltd, 28 November 2007).
The ASA has upheld complaints against promoters who could show they had enough stock of a promotional good but could not explain why customers wanting the offer were told that it was unavailable. Even if they have accurately estimated, and can satisfy, demand, promoters should ensure that the offer is communicated to all those along the retail chain and that sales staff do not misinform consumers about its availability (DSG Retail Ltd, 16 June 2004 and 25 February 2004). In 2006, the ASA upheld complaints against a Marriott Hotels promotion in which an internal error caused the promotion to be unavailable until six days after the advertising for it appeared. The ASA acknowledged that errors sometimes occurred, but considered the promotion had not been administered with due care (Marriott Hotels Ltd, 11 October 2006).
Although the Hoover fiasco has not been repeated on the same scale, promoters should bear in mind that being unable to satisfy demand can generate much adverse publicity and damage their brand (Ernest & Julio Gallo Winery Europe and J Sainsbury plc, 12 January 2005; Avon Cosmetics Ltd, 28 July 2004; British Telecommunications plc, 12 January 2005, and Express Newspapers plc, 6 April 2005).
Promoters should ensure that they communicate accurately what is on offer. Confusion can arise if promoters offer both prizes and gifts or different types of promotional goods. In 2004, the ASA received complaints about a promotion that offered “free … for every reader … DVD film …” and depicted five DVDs. Because the promoters had not made sufficiently clear that participants would be randomly allocated one of several DVDs not depicted, the ASA asked the promoters either to depict all or none of the DVDs on offer or to state that those depicted were only a selection of those available (Associated Newspapers Ltd, 3 November 2004).
In 2006, the ASA reviewed a newspaper promotion for a “FREE DVD FOR EVERY READER”. It had received complaints because some readers could not obtain their first choice of DVD because promotional passwords had been placed on websites that anyone could use. The ASA concluded that, because the promoters had made a reasonable estimate of demand and could not have anticipated the increase in demand, the promotion had been administered responsibly (Independent News & Media (UK) Ltd, 7 February 2007).
A front-page flash for a free road atlas was complained about because the complaints could not obtain the free item. Although it was satisfied that the promoter had made a reasonable estimate of demand, the ASA concluded that the promotional literature exaggerated where consumers could collect their atlas from (Express Newspapers, 29 October 2008). Promoters are reminded to make restrictions, such as geographic exclusions, clear in promotional material.
One sector that generates a lot of complaints about the availability of promotional offers is the travel industry. Many airlines offer special flight prices and should ensure that they can offer around 10% of flights at the promotional price (See Help Note on Travel Marketing). In 2008, the ASA upheld complaints about a flight sale that promised up to 25% off all flights. Because flight prices change with fluctuating demand and the promotion stimulated demand, prices before the promotion were sometimes cheaper than the discounted fares. The ASA told the promoter to make clear that the price of flights, although discounted, might rise during the promotional period (easyJet Airline Co Ltd, 16 April 2008).
And, finally, Rule 8.13 states that if “a prize promotion is widely advertised, the promoter must ensure the widespread availability of the requisite forms and any goods needed to establish proof of purchase”.
This advice is designed to be read in conjunction with the Sales Promotion section of the CAP Code and the other entries in this advice section. Also, promoters might want to seek legal advice.