This year on Black Friday, which takes place on 25 November, it’s anticipated that more than ever, consumers will be looking to bag a bargain in time ahead of Christmas. It’s a well understood principle of consumer protection law, that consumers are entitled to rely on information and statements made by sellers. This means that for businesses, the due diligence stakes are high.
Below, are some of the watchouts from the Furniture & Home Improvement Ombudsman (FHIO) that businesses need to be aware of when planning their sales promotions so that they don’t fall foul of practices that are banned and do start the festive season off on the right foot.
The Consumer Protection from Unfair Trading Regulations 2008 is an important piece of consumer law that businesses need to be aware of because it impacts all areas of a business’ dealings with its consumers. The regulations contain 31 banned practices, totally outlawed and not justifiable in any form. Several of these relate to sales and price promotions which could be used to manipulate consumer behaviour and affect their transactional decisions.
Banned business practices
Some of the commercial practices that businesses should be aware that they are not permitted to carry out any include:
- Making false claims about endorsements i.e. from a public or private body
- Advertising products or services at a specific price if it has reason to believe that they will not be available in reasonable quantities at that price for a reasonable period without making this clear in the promotion.
- Advertising a product at an attractive price to encourage interest and then discouraging its purchase in order to persuade the consumer to switch to something different (known as bait & switch).
- Falsely state that a product will only be available for a very limited time, or that it will only be available on particular terms for a very limited time, in order to elicit an immediate decision and deprive consumers of sufficient opportunity or time to make an informed choice.
- Making false claims about closing down or re-location sales.
Too good to be true?
In addition to the outlawed commercial practices, there are others that are unfair if they contravene the requirements of professional diligence; and materially distort (or are likely to distort) the economic behaviour of the average consumer with regard to the product. This includes:
- Misleading actions which can include both the information provided and/or the way in which it is presented i.e. where the overall presentation is likely to deceive, and this includes the price and the way in which it is calculated.
- Misleading omissions which is also drawn widely to include information which is omitted, hidden, unclear or untimely and which also includes information relating to the price and how it is calculated.
- Aggressive practices which can include harassment, coercion and undue influence and also the exploitation by the trader of any specific misfortune or circumstance of such gravity as to impair the consumer’s judgment, of which the trader is aware, to influence the consumer’s decision with regard to the product.
Some of these appear blatant and a business might suggest that they would never intentionally set out to manipulate, hide information from consumers or act with anything other than good faith, but it’s important to remember that sometimes situations arise inadvertently, despite best intentions, and navigating those circumstances can be tricky, particularly if a business is unable to evidence its due diligence, planning and communications with its supply chain.
Kevin Grix, CEO and Chief Ombudsman, FHIO said, “It’s crucial that as we approach Black Friday, one of the busiest days in the retail calendar, businesses should take heed of the fact that choice is key for consumers, but also the way in which this is presented. In the current climate, trust is vital and demonstrating a commitment to responsible retail can be a crucial component of this, securing repeat business beyond an individual sale event.”
The Ombudsman offers various courses that have been designed to help businesses assess and respond to risk, ensuring compliance with a range of consumer protection laws and embedding the spirit of consumer confidence.
For more information on training, visit www.fhio.org.