When cascading pricing descends into misleadingness

09 December 2005

The ASA upheld complaints about this ad.  Click the link on the right to read the ruling.

Cascading pricing (the method of showing a series of previous prices at which a product has been sold) is a popular tactic used by retailers to show how prices have been reduced over time.  And it gives consumers useful information on which to base their possible decision to buy.  When that technique is coupled with savings claims for the product, however, difficulties can arise.

In a recent investigation, the ASA ruled that advertisements that made savings claims and gave cascading prices were misleading, because they did not make clear to which previous price the savings claims applied.  The ASA thought consumers might infer from the advertisements that the claimed savings were against the most recently charged prices; unfortunately, they were against an older, higher price.

Because the advertisement did not make clear the specific prices against which bold savings claims, such as “up to 25% off%” and “save over 25%”, were made, the ASA believed the advertisements exaggerated savings that were available to consumers.

Click here to read the ASA’s adjudication

The technique is commonly used by retailers.  In pursuit of a level playing field the Compliance team has communicated the ASA’s ruling to major retailers in the UK asking them to make clear, when stating savings claims and cascading prices, the earlier price to which the savings claims refer.