The Competition and Markets Authority (CMA) has advised that it will investigate whether the discount voucher site Wowcher has been using unfair tactics to pressure customers to complete purchases quickly. In particular, the CMA will examine whether Wowcher have misled customers by using countdown timers and other urgency claims, which could put pressure on customers to act quickly to avoid missing out.
This investigation follows an open letter published by the CMA to all online businesses. The letter advises businesses to check whether they are using misleading or unfair urgency claims and if so, to change their practices so they don’t break the law. Urgency and price reduction claims include claims like ‘Selling fast! Only 7 left!’, ‘Offer ends in 12 hours’ or ‘Selling at half price!’. These claims can be legitimate and helpful when they alert consumers to genuine special offers or provide helpful information about stock levels or selling conditions, but they should not be used to pressure customers into a purchase or mislead customers about the timeframes the offer is available for, or the usual selling prices or actual discounts being received.
In their open letter, the CMA provided a number of examples of misleading urgency and price reduction claims, and we’ve highlighted a few of these below so that you can ensure you avoid using these unfair practices.
For more guidance on making sure your advertising, marketing and labelling isn’t misleading, see our Q&A.
Misleading urgency claims
These are claims that mislead customers into thinking a special offer or discount only lasts a certain amount of time, or that they have a limited amount of time to complete their purchase, when that isn’t the case. Some examples provided by the CMA include:
1. Promotions that don’t end when the promoter says they will
Offers that include claims like ‘Deal of the day! Ends tonight!’ or ‘Special offer ends in 2 hours!’ when in fact, the deal will continue past that deadline, are misleading. They put unfair pressure on a customer to make a quick purchase based on false information.
2. Promotions that end when the promoter says they will, but a new offer which is substantially the same takes its place
For example, a trader offers 50% off Product X which ends tonight, but tomorrow they start a new sale offering 50% off all products including Product X. This is misleading because the customer has no need to rush into their purchase.
3. Unnecessary checkout timers
Checkout timers are misleading if they imply the customer has a limited time to make their purchase, when in fact the timer restarts once it runs down or if the customer refreshes the page.
4. Misleading claims about stock levels
A site might say something like ‘Hurry, stock levels are low!’ or ‘Only 5 left in stock’ to pressure customers, when in fact the business is about to get more products in stock and/or even if they have low stock, they are able to purchase and distribute more easily. This is misleading.
5. Creating a false sense of urgency
You’re not allowed to tell someone they need to act quickly or risk missing out, if that’s not in fact true. These types of misleading claims might include ‘Act fast! 10 people have this in their bag now!’ or ‘Hurry! 10 people are viewing this now!’. Although these claims might be true, if your stock levels are still high or you could still perform the contract without delay, it’s misleading to tell the customer they need to hurry.
Other misleading urgency claims include telling customers that a certain product has been bought X times in the past hour, but in fact that number included sales of different models or brands of product, or telling customers that a certain number of products have been sold in 24 hours, but that was not within the last 24 hours but instead a popular 24 hour period in the past.
Misleading price reduction claims
These are claims that distort the actual discount that a customer is getting, for example by comparing the discounted price to a price that the product is rarely sold at, or raising the price temporarily in order to promote a bigger discount. Some examples provided by the CMA are included below:
1. Comparison prices that don’t reflect the usual price
A trader might say that a product is reduced from £100 to £40, which sounds like a great discount. However, if the trader has offered the product at the lower price for a long time, very few items were ever sold at the higher price, or the higher price was a short-lived price hike, the claim is misleading. This is because the higher price is not the usual selling price, so the customer is misled into thinking they have made a large saving.
2. The price flip flops between higher and lower prices
If a product’s price is constantly being raised and lowered, the higher price can’t be promoted as the usual selling price. This kind of claim is likely to deceive the customer into thinking they are getting a better deal than they actually are.
3. Claims omit information that should be disclosed upfront
For example, a site says ‘50% off everything!’ but does not clearly and prominently disclose that the customer must spend £100 to get the discount. This type of claim is still misleading if the trader includes the condition at a later stage in the shopping process, or in small or pale font near the initial offer, as the eye-catching offer unfairly encourages the customer to start shopping.
The CMA points out that combining urgency claims with price reduction claims, and/or repeating the claims throughout the customer journey, is even more harmful to customers.
It’s in your best interests to be upfront and clear with your customers, both to protect your business from a legal standpoint, and also maintain a good relationship with them. Customers who realise they have been misled or feel unfairly pressured may be less likely to return to your site and/or may make a complaint against you. If you aren’t sure whether your online claims are legally permitted, you can access a specialist lawyer in a few simple steps using our Ask a Lawyer service.
Marion joined Sparqa Legal as a Senior Legal Editor in 2018. She previously worked as a corporate/commercial lawyer for five years at one of New Zealand’s leading law firms, Kensington Swan (now Dentons Kensington Swan), and as an in-house legal consultant for a UK tech company. Marion regularly writes for Sparqa’s blog, contributing across its commercial, IP and health and safety law content.