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JohnMac79

Legality of dicounted store prices

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Does anyone have know the legality of selling product as 'discounted' rates when they have not previously been on sale at the 'higher' price? I know there are certainly laws around advertising items in supermarkets for example, that you cannot sell it at a 'discounted' price if they have not been sold previously for X amount of time at the original price.

 

In practice businesses will now need to adopt and document why a pricing practice or promotion is fair and not misleading. This is because if a business is challenged under the Consumer Protection from Unfair Trading Regulations 2008 (the “CPUT Regulations”) it will be reliant on showing that it had a due diligence system in place to prevent misleading practices.  While this may sound onerous, in our view a simple and efficient system can be created that will meet the due diligence requirements.  But, without doubt, it will require a change in approach by marketers and in-house lawyers who plan and advise on promotional campaigns.

For example, when running a promotion involving a price comparison showing the business’s original price and a discounted price, under the new Guide you will need to be prepared to justify and document the answers to the following questions:

 

  1. How long was the product on sale at the higher price compared to the period for which the price comparison is made?
  2. How many, where and what type of outlets will the price comparison be used in compared to those at which the product was on sale at the higher price?
  3. How recently was the higher price offered compared to when the price comparison is being made?
  4. Where products are only in demand for short periods each year, are you making price comparisons with out-of-season reference prices?
  5. Were significant sales made at the higher price prior to the price comparison being made or was there any reasonable expectation that consumers would purchase the product at the higher price?

 

What many will now find surprising is that when answering those questions, practices that have been widely used by businesses for many years are now deemed under the Guide as “less likely to comply” or, in other words, more likely than not to be viewed as misleading and in breach of the CPUT Regulations.

 

So what is now less likely to comply?

 

  • Price establishing for 28-days within a 6-month period so that a product is at full price for one month and then on discount for 5 months. The recommendation is to move to 1:1 pricing (i.e. the product is offered at a discount for the same period of time or shorter than the product is sold at full price).
  • Using different reference prices in different stores but picking the highest reference price as the “was” price for a promotion running in all stores. For example, product x sold at £3 and £4 in different stores, reduced to £2 and sold at half price in all stores.
  • Using a reference price that applied many months (at least more than 2 months) prior to the promotion.
  • Price establishing seasonal products (e.g. Easter eggs, British strawberries) out of season to be able to show a discount when the product is in season.
  • Using a reference price when only a minimal amount of product actually sold at that price. There is now an expectation that a business will have sold a “significant number” of units at the higher price in order to make a price comparison.

 

The Guide also provides three examples of price comparisons that may not be genuine:

 

  1. Offering successive types of discounts on the same product. For example, month one: product priced at £500 but within a “Buy 2 get 10% off promotion”; month two “Was £500, now £350”.
  2. The higher price is not the last price that the product was sold at, for example there have been intervening prices, but the higher price is used as the reference price.
  3. There are a series of price claims but each subsequent claim does not offer a greater discount. For example, “Was £150, now £75”, followed by “Was £150, now £99”.

 

 

 

I want to make it clear, i am not making any accusasations as i am clearly not an expert, and i know that technically they could claim you are getting a 'special mission' (that most ships seem to come with anyway) but WG have a habit of putting everything up with 'discounts', and it always feel disingenuous and was wondering if anyone with better knowledge could offer some insight.

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they have a huge team of lawyers, so you would imagine they just comply with whatever regulations they have to.

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Yes I have noticed this as well. I have seen some interpretations of consumer protection laws that if the product is sold for a discounted price more than the full price, the discount is viewed as misleading advertising. I might remember wrong but I think f.e. in Slovakia you cannot advertise a discount if a product was never sold for the non-discounted price.

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Can only speak for Germany, but here a product has to have been sold for the original price at least regionally before you can advertise a price as a discount. However there may be differences between stationary and online retail I am not aware of. I don't know EU regulations on this by heart, but I would imagine those need not necessarily apply since the Internet is by definition global. 

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16 hours ago, JohnMac79 said:

Does anyone have know the legality of selling product as 'discounted' rates when they have not previously been on sale at the 'higher' price?

I'm a bit rusty on this, but from memory (UK law):

  • Was/now type messaging requires the product to have been on sale at the higher price previously (it used to be 28 days, although it *may* have changed to a 'reasonable' amount of time).
  • You can do MSRP/Our Price type stuff without selling at the higher price first.
  • Bundle pricing, which is what WG usually go in for, is - I think - kosher. For instance, Marco Polo alone doesn't show as a reduced price, but the bundles do.

I do think that plonking 'special offer' tag on the plain 'ship only' Marco Polo is probably against the rules though...

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Vor 7 Stunden, JohnMac79 sagte:

I want to make it clear, i am not making any accusasations as i am clearly not an expert, and i know that technically they could claim you are getting a 'special mission' (that most ships seem to come with anyway) but WG have a habit of putting everything up with 'discounts', and it always feel disingenuous and was wondering if anyone with better knowledge could offer some insight.

and which item are you talking about?

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8 hours ago, Salentine said:

they have a huge team of lawyers, so you would imagine they just comply with whatever regulations they have to.

Yeah, the team of lawyers who didn’t realise the xmas lootboxes advertising broke advertising standards and got their asses kicked when trying to defend it. 

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6 hours ago, SirTogII said:

Yeah, the team of lawyers who didn’t realise the xmas lootboxes advertising broke advertising standards and got their asses kicked when trying to defend it. 

ooh, so that's why they offered a refund, oh wait, no it wasn't because of any advertising rules they broke, that was because we found out that they weighted the results so people got the same ships all the time.

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There are no products to my knowledge permenantly discounted. If you mean e.g. 10000 dubs at 15% discount, it means compared to buying 1dub. Or a bundle at 15% discount compared to buying what’s included separately.

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Mabe it is possible to bypass this provlem by having standardized prices for certain tiers and classes, so a discount equals "a lesser than usual price".

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2 hours ago, Salentine said:

ooh, so that's why they offered a refund, oh wait, no it wasn't because of any advertising rules they broke, that was because we found out that they weighted the results so people got the same ships all the time.

Not sure what you are arguing here but to claim they comply with regulations because they have a large team of lawyers is incorrect since they don’t and it’s been proven. 

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There was a documented case in Fallout 4, in which they sold something like a Christmas Special for X at a 25% discount, even tho the actual price of the advertised goods was the reduced price they aimed at with the discount. In addition to a lot of other false promises they made and refunds that had to be handed out from the game, items, accounts and merch, this was highlighted and they swiftly removed the offer because it is an illegal business practice in the US.

 

You cant sell a premium ship with a worth of 7500 doubloons as a 50% discount from 15'000. Thats why a lot of time those things are sold in bundles with rather undefinable items, bloating the original value to give the perception of a higher discount. Things like cosmetics, flags, XP missions, etc. which cant be bought in any other way. This creates a legal grey zone and if they dont exaggerate it to an absurd amount, this is - sadly, completly legal.

 

This gets more complicated if unpreventable factors like market fluctuation, natural influence, etc. get added, yet this rarely is the case for digital goods, as WG is making the prices themselves. The presented example like a supermarket falls under this category of complication, as prices for natural goods can be different, depending on the status of the market and nature, making laws and regulations around discounts more difficult.

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Vor 10 Stunden, SirTogII sagte:

Yeah, the team of lawyers who didn’t realise the xmas lootboxes advertising broke advertising standards and got their asses kicked when trying to defend it. 

As much as I was happy to see WG subject to some amount of legal scrutiny, I don't think being required to change the ads only after the promotion ended counts as 'getting their asses kicked'.

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16 hours ago, 300ConfirmedKills said:

As much as I was happy to see WG subject to some amount of legal scrutiny, I don't think being required to change the ads only after the promotion ended counts as 'getting their asses kicked'.

The lawyers did get their asses kicked, their arguments laughed at. WG not so much although it’s hard to tell how much the case influenced them to offer the refunds. Plus they will need to comply in future campaigns or risk a lot more than a slap on the wrist. 

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On 3/18/2021 at 8:35 PM, JohnMac79 said:

Does anyone have know the legality of selling product as 'discounted' rates when they have not previously been on sale at the 'higher' price? I know there are certainly laws around advertising items in supermarkets for example, that you cannot sell it at a 'discounted' price if they have not been sold previously for X amount of time at the original price.

 

In practice businesses will now need to adopt and document why a pricing practice or promotion is fair and not misleading. This is because if a business is challenged under the Consumer Protection from Unfair Trading Regulations 2008 (the “CPUT Regulations”) it will be reliant on showing that it had a due diligence system in place to prevent misleading practices.  While this may sound onerous, in our view a simple and efficient system can be created that will meet the due diligence requirements.  But, without doubt, it will require a change in approach by marketers and in-house lawyers who plan and advise on promotional campaigns.

For example, when running a promotion involving a price comparison showing the business’s original price and a discounted price, under the new Guide you will need to be prepared to justify and document the answers to the following questions:

 

  1. How long was the product on sale at the higher price compared to the period for which the price comparison is made?
  2. How many, where and what type of outlets will the price comparison be used in compared to those at which the product was on sale at the higher price?
  3. How recently was the higher price offered compared to when the price comparison is being made?
  4. Where products are only in demand for short periods each year, are you making price comparisons with out-of-season reference prices?
  5. Were significant sales made at the higher price prior to the price comparison being made or was there any reasonable expectation that consumers would purchase the product at the higher price?

 

What many will now find surprising is that when answering those questions, practices that have been widely used by businesses for many years are now deemed under the Guide as “less likely to comply” or, in other words, more likely than not to be viewed as misleading and in breach of the CPUT Regulations.

 

So what is now less likely to comply?

 

  • Price establishing for 28-days within a 6-month period so that a product is at full price for one month and then on discount for 5 months. The recommendation is to move to 1:1 pricing (i.e. the product is offered at a discount for the same period of time or shorter than the product is sold at full price).
  • Using different reference prices in different stores but picking the highest reference price as the “was” price for a promotion running in all stores. For example, product x sold at £3 and £4 in different stores, reduced to £2 and sold at half price in all stores.
  • Using a reference price that applied many months (at least more than 2 months) prior to the promotion.
  • Price establishing seasonal products (e.g. Easter eggs, British strawberries) out of season to be able to show a discount when the product is in season.
  • Using a reference price when only a minimal amount of product actually sold at that price. There is now an expectation that a business will have sold a “significant number” of units at the higher price in order to make a price comparison.

 

The Guide also provides three examples of price comparisons that may not be genuine:

 

  1. Offering successive types of discounts on the same product. For example, month one: product priced at £500 but within a “Buy 2 get 10% off promotion”; month two “Was £500, now £350”.
  2. The higher price is not the last price that the product was sold at, for example there have been intervening prices, but the higher price is used as the reference price.
  3. There are a series of price claims but each subsequent claim does not offer a greater discount. For example, “Was £150, now £75”, followed by “Was £150, now £99”.

 

 

 

I want to make it clear, i am not making any accusasations as i am clearly not an expert, and i know that technically they could claim you are getting a 'special mission' (that most ships seem to come with anyway) but WG have a habit of putting everything up with 'discounts', and it always feel disingenuous and was wondering if anyone with better knowledge could offer some insight.

I believe there is a distinction between discount and sale in legal terms.

 

In the UK an item cannot appear in a 'Sale'  at a reduced price unless it has been previously advertised and made available for a period of time at a higher price. The new Consumer Rights act doesn't specify wha that time period has to be only that it is reasonable. Old law used to say 28 days

.

Discount is a very different thing. Any product (new or old) can be sold at a discount at any time. If an item has an RRP of £100 and the retailer chooses to sell it for £75 they can promote it as a 25% discount.

 

 

The consumer rights group WHICH says this on the subject ...

 

The law, as contained in the Consumer Protection from Unfair Trading Regulations, simply says that if a product is on sale or special offer, the retailer must show the original price and it must have been selling at that price for 'a meaningful period of time'.

In practice this usually means that the discount must be available for the same period of time or less than the product was sold at the higher price.

These are some of the things to look out for when shopping in a sale:

The basis for the saving must be clear. For example, a sign shouldn't just say 'sale £15' – it should say something like 'was £50, sale price £15'.

If there’s a promotional offer on an item, the price the item is being compared to must be genuine. If the higher price it’s being compared to was the last price the item was retailing at or the 'was/sale price' promotion hasn’t run for any longer than the item was being sold at the 'was' price, this promotional offer is more likely to be genuine.

A multi-buy (three for the price of two, for example) or combination offer (any three items from a range of options for £5, for example) should be cheaper than the total cost of buying the same items separately.

Additionally, Trading Standards advises retailers to make it clear when a comparison price is actually the recommended retail price (RRP) because the retailer may never have charged that price. The RRP can’t differ significantly from the price that the product or service is generally sold.

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On 3/18/2021 at 10:46 PM, Salentine said:

they have a huge team of lawyers, so you would imagine they just comply with whatever regulations they have to.

how do you know that?

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Vor 3 Stunden, SirTogII sagte:

The lawyers did get their asses kicked, their arguments laughed at. WG not so much although it’s hard to tell how much the case influenced them to offer the refunds. Plus they will need to comply in future campaigns or risk a lot more than a slap on the wrist. 

I'd like to believe this, but the body that passed judgement on WG is a voluntary association of Cypriot advertisers, as I understand it. I wonder about their power to impose meaningful sanctions.

Vor 2 Stunden, hellhound666 sagte:

how do you know that?

A quick DDG search of 'wargaming legal head' brought me to the linkedin page of their Deputy General Counsel, who describes co-managing a 'legal team of 9'. Some follow up searches revealed their General Counsel and a few Senior Counsels. I don't know if you'd call that a 'huge team', but it's certainly not an area of the business that WG is neglecting, as you would hope for a company of their size.

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7 hours ago, Fat_Maniac said:

The consumer rights group WHICH says this on the subject ...

 

The law, as contained in the Consumer Protection from Unfair Trading Regulations, simply says that if a product is on sale or special offer, the retailer must show the original price and it must have been selling at that price for 'a meaningful period of time'.

 

1968500219_specialoffer.thumb.jpg.a430db0099c172a13de76712610396eb.jpg

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5 minutes ago, JohnMac79 said:

 

 

1968500219_specialoffer.thumb.jpg.a430db0099c172a13de76712610396eb.jpg

Based on that image and what WHICH say somebody could have course to complain to Trading Standards here in the UK then. @MrConway @Tuccy you might want to pass this on to the right people to check.

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