The Chartered Trading Standards Institute Guide to Pricing Practices (The Guide) will be an essential for email marketing. It replaces the Pricing Practices Guide (PPG), with which you will no doubt be familiar, and similarly, it is not legally binding and merely a series of recommendations for best practices. However . . .
It is not a leap of faith to say that, as with the PPG, the CTSI Guide will become accepted by both regulators and courts in determining whether a price presented in a campaign or promotion is misleading. As such it is essential to become familiar with its provisions, recommendations and advice. To ignore it is not to commit an offence, but is a tremendous risk.
The Guide has been marketed as not creating a safe harbour – remember that? – but it is fair to say that if you conform to the advice the full weight of the regulators is unlikely to fall on you even if your promotion was misleading.
The Guide is a change in approach to regulating pricing policies, and a fundamental one at that. The PPG provided some consistency in pricing so ensuring a fairly standard approach and the easy out for companies was to point to the PPG paragraphs with some assurance that they were untouchable. The Guide is somewhat different.
One example is the loss of the ’28-day rule’. This was simple, straightforward and, as anyone knows who has entered a shopping centre, open to abuse. The new system can be explained, to an extent, by a subtle example. Say you have been selling skis for some months. Once the European season has ended, it could well be, that is as far as anyone can go at the moment, that a price reduction heralded as a sale, and possibly without explanation, could fall foul of The Guide.
In essence a company will have to follow different methods when deciding on a specific price, in our case for an email marketing campaign. The processes in coming to a price and, most importantly, the method by which this price is presented, will have to be documented to show why it is fair and not misleading. You need to show due diligence.
New systems will be essential which will include, inter alia: the history of the product, its pricing levels during the relevant period prior to the offer, any previous offers on the product, any seasonal variations. The list might look a bit daunting at first but you will, of course, have these records. You might have to make them more readily available, but essentially the requirements are simple, straightforward and, if you plan with care, not too costly.
The Guide gives examples of what they consider to be doubtful, which we will cover in later articles. We will try to be specific, but The Guide makes that difficult.
The Guide requires businesses to assess their promotions on a factual basis rather than following a tick-box system to ensure compliance. On the positive side, the regulators in the past have shown themselves to by sympathetic to those who have tried to comply.