New advice published by Committee for Advertising Practice Executive on RRP advertising

The Committee for Advertising Practice (CAP) Executive has published a useful note to explain what retailers should and should not do when advertising a product with a recommended retail price (RRP). Retailers must understand the guidelines to avoid challenges from the Advertising Standards Authority (ASA).

What is RRP?

RRP means the recommended price to sell a product, as the manufacturer or supplier recommends, although how much a retailer charges for a product is a decision for them. An RRP must not be false; one cannot be created to portray a discount, nor should a retailer try to influence the product manufacturer/supplier to change the RRP.

Is there a risk in comparing prices with the RRP?

Comparing a product’s price with the RRP is a common practice. However, retailers should ensure that the RRP is in line with the price at which the product is generally sold (usually by comparison with multiple competitors), even when the manufacturer provides the RRP. The ASA may investigate the claim if retailers can’t prove the product was sold at the RRP to substantiate their comparison.

When shouldn’t an RRP be used?

The CAP advice note also recommends avoiding using RRP as a comparison if a retailer is the only seller of the product. RRP should also not be used for products that have not yet launched.

Case Study

In 2022, the ASA took action against Happy Beds Ltd in relation to a price comparison on a bed frame. The advert claimed the frame had been reduced from £845.98 to £469.99, with Happy Beds claiming that the higher price was the RRP provided by the supplier or manufacturer.

Despite providing links to other retailers with a similar RRP and two anonymised receipts showing that those retailers had sold the bed frame for the higher price, the ASA noted that the product had not been “generally sold” at that price, and the advert was misleading. Based on their reasoning, the ASA would have expected the bed frame to have been sold across several retailers at £845.98.

As a result, the ASA asked for the advert not to appear again and advised Happy Beds that future price comparisons in adverts should not mislead by falsely claiming a price advantage.

What are the consequences of non-compliance?

Misleading advertising can have severe reputational and financial consequences as the ASA will publish its findings against the retailer in question and can request the removal of paid search ads or other non-compliant content from social media platforms. Where a retailer does not cooperate with the ASA, they can refer the case to Trading Standards, which has more expansive enforcement powers, including criminal convictions, confiscation of financial assets, fines, and other sanctions.

You can read the advice note here.

If you would like help to reviewing your practices, speak to one of our colleagues in the Regulatory team.