In 2023, Citizens Advice revealed a staggering figure: consumers spent nearly £2.1 billion on items they didn't want, need, or later regretted over the course of a year. This spending was largely driven by manipulative online choice architecture – a design strategy used by websites that push consumers into making quick decisions they might regret.
What is Online Choice Architecture?
Online choice architecture refers to the way choices are presented to consumers, including how options are displayed and organised. One common example is the ranking of search results, which can make it easier for users to find what they're looking for.
However, these techniques can also be used in ways that manipulate or mislead consumers, steering them toward options that may not be in their best interest. This includes tactics such as:
- Drip pricing: where the final price only becomes clear at the end of a purchasing process.
- Intrusive default settings: options that automatically enrol users in services unless they actively opt out.
- Misleading opt-outs: difficulty in cancelling subscriptions, services or rejecting unwanted add-ons.
How This Can Impact Your E-Commerce Business
The UK's Competition and Markets Authority (CMA) has recently taken action against an e-commerce website for using some of these misleading techniques. This has led to a significant overhaul of its online sales practices and a commitment to refund over £4 million. The CMA's investigation revealed the website used several unfair practices, including:
- Misleading urgency claims: using countdown timers and phrases like "In High Demand" to create a false sense of urgency, pushing consumers to make quick decisions.
- Hidden charges and pre-ticked boxes: automatically enrolling customers into VIP memberships and other services through pre-ticked boxes, leading to unintended purchases.
As a result the investigation, the online provider has signed undertakings to revise its selling practices, including:
- Using accurate countdown timers: timers must not mislead consumers or create a false sense of urgency. The platform will remove misleading countdown timers that suggest customers need to act quickly to avoid missing out.
- Honest marketing claims: all claims about product scarcity and popularity must be truthful and reflect real stock levels and demand.
- Refunding VIP Membership fees: customers who were automatically signed up for VIP memberships or other services via pre-ticked boxes will be refunded in credit, with the option to convert it into cash. The platform will also stop using pre-ticked boxes to ensure customers make informed choices.
These are just a few practical examples, and what's considered misleading can vary based on your website's context and design. It's essential to regularly review your online sales practices, as small processes or options might be seen as misleading depending on the case. Expert legal advice can help identify potential issues and ensure your practices comply with regulations, helping you avoid unwanted investigations and fines.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.