You know how when your kids come home from school and show you how they do math these days? And you say, “That’s not how you do math.” And then you learn it is “new math.” In looking at Guardian’s website, apparently there is a new way to teach kids how to ride a bike that doesn’t involve training wheels or pedals (at first) and evolves into holding the back of the bike seat and letting go without telling them. And these things are not cheap.
The National Advertising Division (NAD) looked at savings claims made for Guardian Bikes. Guardian consistently advertises with strike-through comparative pricing that explains that they are showing the value of their bikes compared with similar competing bikes. They do this by showing a smaller competitor price crossed out next to a larger Guardian price. Next to the crossed-out price, there is a reference to “comp value,” with an icon explaining how it is calculated. NAD noted that typically the Guardian price is approximately 40% less than the price of the competing bike. NAD did not look at this practice generally or seem to take issue with how Guardian presented the price comparison when comp value was clearly connected to the price comparison. But it did take issue with how these ongoing comparisons were presented in conjunction with a periodic promotion when Guardian included a free accessory package.
Over Memorial Day weekend, Guardian promoted a free $100 value accessory bundle along with the regular 40 percent savings versus competitive bikes but without the reference to competing bikes. When the ad was presented this way, NAD found it implied there was a 40% short-term reduction in the price of the Guardian Bikes rather than this being a reference to the comparative value claim. NAD’s findings make clear that if you are doing compare-at pricing, each time you show a higher strike-through price or mention a percentage or dollar amount off, you need to clearly identify it as a comparative value claim and not a markdown. In addition, it is not appropriate to refer to such price comparisons as sales. In other words, by including the comparative value with the limited-time free accessory bundle, Guardian was inappropriately combining these value messages, because one was a short-term sale (the free bundle) but the other (the price comparison) was not.
Another practice that NAD took issue with was the use of a countdown clock. During the Memorial Day sale, Guardian used three countdown clocks, one for each day of the sale. When one clock ran down, it was replaced with a new clock. NAD was concerned that this would be understood as indicating the sale was for a single day, not three days. Guardian agreed not to use consecutive countdown clocks and to include a start and an end date with any limited-time promotions. NAD expressed concern that such urgency language could harm consumers if they thought they needed to act more quickly than needed to take advantage of the deal.
There is so much attention on pricing these days – from the enforcers, both Federal Trade Commission and state, at NAD and in private class actions. It is not surprising that with prices rising, companies want to promote deals, but overstating the value is likely to bring you attention you don’t want. Taking a fresh look at how you are promoting your value message, particularly as we get closer to Black Friday and the holiday push, is just smart business.
