Since changes to consumer law set out in the Digital Markets, Competition and Consumers Act 2024 came into force in April, pricing has been foremost on the CMA's radar, and it recently published new guidance on drip pricing for consultation. However, it's not just the CMA that is interested in pricing, and the ASA recently issued a ruling about misleading price claims (although the case facts pre-dated the Act).
Even though it does not have the status of law, the ASA took into account the Chartered Trading Standards Institute guidance for traders on pricing practices. The Guidance states that it is important that price comparisons are genuine. As an example, it says that comparing a current price to a higher one when it was not the last price the product was sold at, because there had been intervening prices may be a price comparison that might not be genuine. The Guidance also states that, when considering whether a price comparison was genuine, attention should be given to whether the stated reference price is a realistic selling price for that product.
In March 2025, Wowcher's website featured a listing for "K18 Leave-In Molecular Repair Hair Mask". The listing included an image of a bottle of hair product which featured the text "15ml". Superimposed text read "NOW £28.99 £64.99 [crossed out]". Text stated, "SAVE 55 percent!". Further text said "Full Details" stated, "We're offering you a K18 Leave-In Molecular Repair Hair Mask for £28.99, saving you up to 55 percent off Global Fulfillment Limited [sic] (Forever cosmetics)'s's [sic] price of £64.99 (correct as of 20.06.2024)".
The complainant challenged whether the reference price and the associated savings claim were misleading.
Ruling
The ASA said that because Wowcher allows third-party merchants to advertise offers on their website, Wowcher is responsible for ensuring that those offers represented a genuine saving.
To demonstrate that £64.99 was a realistic, usual selling price for the product concerned, the ASA expected Wowcher to provide evidence that a significant number of sales had been made at that price.
The ASA did not receive detailed sales or pricing history for the hair product from Wowcher. However, it understood that £64.99 was not the immediately preceding price of the product, because the merchant whose price Wowcher was referencing currently had the product on sale for £39.99. The ASA did not know how long the product had been on sale, but noted from the ad that the last time the reference price had been verified as correct was June 2024. As a consequence, it considered the savings claim for the product had not been made against the immediately preceding price at which the product was sold when the ad appeared. The ASA also considered that this suggested that £64.99 was not the usual selling price for that size of the product. Consequently, the quoted 55% saving was not genuine.
Because the ASA had not seen evidence that the savings claims made represented a genuine saving against the usual selling price of the product, it concluded the ad was misleading.
A topic to watch
The CMA currently has a case against Emma Sleep, opened under its old powers, involving reference pricing. We understand this case is currently waiting for a court date to determine the issues. This case will act as an important precedent for reference pricing and is likely to influence future action in this space by both the CMA and the ASA.
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