Rogers & Norton News
It’s that time of the year when consumers rush to the Sales and remind retailers of their rights when the goods do not meet expectation, armed with the Consumer Rights Act 2015 which came into force in October last year. The Act introduced the 30 day rule that gives consumers the right to reject an item – it also allows a trader to be given one opportunity to offer a repair or replacement. But as the New Year approaches, how should the issue of an unwanted Christmas present be dealt with?
It can be demoralising for a retailer to work hard throughout the autumn/winter period and to focus on sales in the busy Christmas period, only to see the product sold in December being brought back in January, “as it wasn’t what they wanted”.
For retailers, if the goods are not faulty the law does not expect you to offer a refund and you are perfectly entitled to refuse their request. While major stores can afford to swap unwanted items for vouchers to spend in store, it is not obligatory for them to bow to commercial pressure.
Sales promotions aim to incentivise consumers to buy products, build customer loyalty and enhance brand awareness. As a marketing tool they are very powerful, but surprisingly, the guidelines which apply to many sales promotions are largely self regulating and, so far as the consumer is concerned, the mechanisms for complaint are far less well known than the consumer rights referred to above. Nonetheless, for those who wish to be less than benevolent this year, scrutiny is just around the corner.
Peter Hastings points out “One of the most common sales promotions involves free offers; the “buy one get one free” offer being a good example. The British Code of Advertising, Sales Promotion and Direct Marketing (The CAP Code) is relevant here, and sets out several important pricing principles, which retailers should keep in mind.
In the context of free offers the CAP Code states that marketing communications must not describe a product as “free” (or similar) if the cost, including the price of a product or service which must be bought in order to obtain the free item, has been increased or the quality of the product or service which must be purchased, as a pre-condition, has been reduced. Similarly, the retailer should not try to recover its overhead in respect of the free item through packaging, handling or administration charges. The term “free trial” must not be used to describe “satisfaction or your money back” offers or those where a non-refundable purchase is required.
The underlying principles of the CAP Code require that promotions should:
- Be legal, decent, honest and truthful;
- Be prepared with a sense of responsibility towards consumers and society; and
- Adhere to the principles of fair competition.
Bearing these principles in mind when creating your seasonal promotions will stand you in good stead. That said there is no legislation which specifically addresses the activity of loss-leading on the part of a trader. Provided the activity does not contravene the UK’s complex competition laws then in most cases it is an acceptable method of sales promotion.”
Our team deals with many contractual and regulatory issues. We recently acted for a national company and addressed the FCA’s concerns about its advertising material. In doing so, we provided training for staff and also advised on new marketing and advertising literature. We have also dealt with what was the OFT and Trading Standards investigations.