Tuesday, 25 May 2010

A Guarantee to Beat Any Price: How Far Should It Extend?

In December last year, the ASA Directorate found a certain advertisement for Game stores to be misleading. The advertisement in question was the following price guarantee:

“...Found it cheaper? Tell us and we will BEAT that price we will not be undersold – if you’ve purchased any item from Game, and within 21 days find the same product at a competitor for less, tell us and we will refund MORE than the difference.
If you intend purchasing from Game and find the same item elsewhere for less at the same time – tell us and we will beat that price!”

The consumer complainant, seeking to purchase a Nintendo Wii console, obtained comparative prices from other dealers, including Amazon.com (a foreign based online store). The price from Amazon.com amounted to R1000.00 less than the console on sale at Game. She stated that Game would not beat Amazon.com’s price, as the price guarantee carried conditions not reflected in the advertisement. The Directorate found that the advertisement omitted a material condition of the guarantee, thus making it misleading.

On appeal to the Advertising Standards Committee (”ASC”), Game submitted that its price guarantee applies only to lawful sales by a competitor, which it contends Amazon.com is not, and that consumers cannot reasonably believe that the price guarantee applies to products bought online from foreign traders.

The ASC declined to rule on whether Amazon.com is acting unlawfully by offering products online to South African consumers. It did, however, find that on the ordinary meaning of the words of the price guarantee that an ordinary reasonable consumer would not read additional conditions into the advertisement. It stated that if the price guarantee was intended to be limited to local price comparisons only, then that should be expressly stated. The decision of the Directorate that the advertisement is misleading was upheld.

I find it difficult to agree with this ruling. I do not believe that an ordinary reasonable consumer would believe that the price guarantee applied to goods bought from foreign traders and would be interested in your comments on this.


Jeremy Speres said...

Thanks for an interesting piece Sara. I agree with the ASC ruling though. The guarantee specifically mentions the consumer finding the item at a "competitor". To my mind, a competitor is someone who offers goods or services in the same market. In a globalised world where e-commerce is increasingly prevalent, local businesses can longer afford to view themselves in isolation from the web, and I feel that consumers would view their guarantee in this light, especially in the absence of any explicit conditions to the contrary...

Jeremy Speres said...

*can no longer