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Report: ASA rules in favour of consumer over Takealot Daily Deals complaint

Takealot Daily Deal.jpg

A Takealot discount was found in breach of the South African advertising code according to a recent ruling by the Advertisement Standards Authority of South Africa (ASA) after a complaint was lodged by a local consumer. Below, read the report on the whole debacle, including the complaint, Takealot’s response and the ASA Directorate’s ruling on the matter.

The complaint

The complaint was submitted by Mr. Philip Bellstedt in relation to an online advertisement appearing in the “Daily Deals” section of the Takealot website, specifically the Samsung 850 Evo Series 250GB SSD. ASA states that the official complaint by Mr. Bellstedt reads as follows:

“The complainant submitted that the item is advertised on sale for R1 399 with a discount of 26%. Takealot usually sells the item for R1 599 and the discount is therefore only 12,5%.” - Source

In light of the complaint submitted by Mr. Bellstedt, ASA took the following clauses in the “Advertisement Code of Practice” into account:

  • Section II, Clause 4.3 – The value of goods
  • Section II, Clause 5.4 – Sale advertising

Section II, Clause 4.3.1 reads: “Consumers should not be led to overestimate the value of goods whether by exaggeration or through unrealistic comparisons with other goods or other prices."

Section II, Clause 4.3.2 reads: “The advertiser should be ready to substantiate any claim he makes as to the value in cash terms of goods offered by him at a lower price or free; and any saving to the consumer claimed to result from the offer of goods at a price lower than their actual value"

Takealot response to the complaint

In response to the complaint, Takealot provided an overview to ASA of how the product in question was advertised, stating that:

  • On the 28 October 2015, it was advertised at a price of R1,399 with a "Was” price of R1899 – a saving of 26%.
  • On the 8 November 2015, it was advertised at a price of R1,499 with a "Was” price of R1,899 and a saving of 21%. 
  • The usual price of the item on the website during October and November was R1,599.

Takealot notes that the 26% and 21% savings where relative to the Recommended Retail Price (RRP) provided by the supplier of the product at “the time of listing on the website”. At the time of writing, the supplier’s identity has not been made public.   On Takealot, the “Was” price was shown next to the product, but the word “Was” would lead many to believe that the previous price was in fact R1,899.

However, if consumers where to read the whole Takealot Terms and Conditions, they would notice that section 10.7 reads:

“The original (or “List Price…”) prices on Deals and other discounted Goods are the recommended retail prices given to us by our suppliers at the time we listed the Goods. Once particular Goods are no longer available as a Deal or at a discounted price, the selling price on the Website may be different from the original price of a Deal or discounted Goods.” - Source  

Takealot further elaborated on the issue, providing the ASA Directorate with confirmation from the supplier that states:  

"In October 2015 the RRP was R1899 incl. VAT. However, it needs to be stated that RRP is a guideline, to help retailers position the product within their selling space and to enable them to market it accordingly”. - Source  

Ruling by ASA Directorate

The ASA Directorate found that Takealot’s reference to a “Was” price instead of actually referring to a RRP is in breach of Section II, Clause 4.3 – The value of goods in the Advertisement Code of Practice outlined in the first section of this article. ASA explains its ruling:  

“The respondent is correct in stating that this term and condition makes it clear what it refers to when claiming ‘Was’. However, the Directorate is not convinced that shoppers would even bother to scrutinize the respondent’s terms and conditions for the intended meaning of the ‘Was’ reference. The word ‘Was’ is not technical, is not accompanied by an asterisk and is not linked with anything to suggest that there is some other meaning than the ordinary reference to the real previous price.   

It is clear that this particular item never retailed at the ‘Was’ price of R1 899. In fact, the respondent confirmed that it ordinarily retails at R1 599. While this means that the sale price was still a saving, the extent of that saving was not accurately presented in the advertising.  

By specifically referring to the ‘Was’ price as opposed to something more accurate like ‘Recommended Retail Price’ or another analogous reference, the respondent creates an impression that each shopper is receiving a greater benefit than is actually the case, rendering the claimed saving misleading. In this instance, the real saving was only 12,5% exactly half of what was claimed.” - Source  

After the ruling in favor of Mr. Bellstedt complaint, Takealot was required to do the following:

  • Withdraw the advertising in its current format;
  • the process to withdraw the advertising must be actioned with immediate effect on receipt of ruling;
  • the withdrawal of the advertising must be completed within the deadlines stipulated by Clause 15.3 of the Procedural Guide;
  • and the advertising may not be used again in its current format.

It looks like Takealot complied with ASA’s ruling. If you take a look at any deal on Takealot now, for example the Tomb Raider Definitive Edition (Xbox One), you can see there is no mention of the word “Was”; only a “List Price” next to the discounted price and a percentage discount, in this case 20%.  

What do you think about the complaint, Takealot’s response and the ruling by ASA? Let us know in the comment section below.

Sources: ASA Ruling, Takealot Terms and Conditions

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