Comparative Pricing Claims Lead to NAD Challenge
Ensure all data is defensible when making comparisons
Comparing pricing to other companies can lead to issues if not substantiated.
One retail grocery chain was challenged through the National Advertising Division (NAD) competitor challenge process. They were claiming a 25-30% savings for the “exact same basket,” which NAD determined as unsubstantiated.
I learned a new advertising term when reviewing this case: “stale pricing.” This essentially means the price comparison is old, or “stale.” Since grocery prices change quickly, it is hard to comply with “current” price comparisons. According to NAD, the price comparison was not current. In some cases, the advertisements ran weeks or months after the comparisons were made. Because of the highly fluctuating price of groceries, for pricing to be “fresh,” an accurate comparison should be made within a short window, such as seven days (in this case).
NAD also noted that the comparative pricing claims may not have accounted for the discounted prices offered through the competitor’s loyalty programs. This is a no-no.
Disclosures: It seems that some disclosures were made, but in some cases, they were not legible. Rule #1 in disclosures is that they must be accurate, not misleading, and legible.
From NAD. “NAD also found that the disclosure was not always present and was sometimes in a small font and hard to read.”
“Exact basket” statements and consumer expectations. This one seems pretty straightforward and logical.
From NAD. “NAD also examined …. claims that consumers could save on the “exact same basket.” NAD found that the phrase “exact same basket” expressly communicates that the items being compared are more than merely similar – they are the exact same – and determined consumers would not expect the “exact same” basket to contain items of different brands, quantities, or other
Read the NAD case here.
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