Whether you celebrate Thanksgiving or not, the one related tradition we appear to have inherited from our American friends is Black Friday. On the last Friday in November each year retailers in the USA offer goods at significant discounts in an attempt to kick-start the Christmas shopping season.
Recent years have seen the Black Friday idea extend to the UK, and this year promises to be no exception – Amazon has even started its sale already, and Argos has announced 13 days of Black Friday deals as it looks to capitalise on the predicted 38% surge in UK spending over the Black Friday weekend this year. Their new CEO is also touring eight stores a day in the run up to Christmas to ensure that the seasonal sales trend continues.
However, as popular as Black Friday is with UK bargain hunters, 2015’s Black Friday experience was not wholly positive, and led to calls for retailers to boycott the 2016 version. The issues for retailers are not simply confined to politics though, and there are several legal issues that ought to be borne in mind by any retailer looking to engage in some serious sales action. We look at some of these below in brief.
One point to note is an issue that we have discussed separately – retailers need to be clear that any sales practices in which they engage do not infringe competition law and, in particular, do not constitute price fixing. You can read our note on this here.
There are other pitfalls to be avoided as well. Notably, traders need to be aware of the rules that apply to any advertising highlighting Black Friday price reductions. The whole premise of Black Friday is to boost sales overall, and it is certainly possible to base an advertising campaign on price reductions and the comparative benefits to the consumer. In doing so, traders need to ensure that the advertising is sufficiently clear as to avoid misleading the consumer – for example, if a trader advertises lower Black Friday prices and compares them to older, higher prices for the same goods, then the advert will need either to refer to the immediately previous price at which the goods were sold or, alternatively, show all of the intervening prices for the goods.
The key is to ensure appropriate transparency and to avoid distorting the consumer’s view of the bargain they are receiving, which is a practice that should also see the trader stay on the right side of applicable consumer legislation as well. For example, it may seem counter-intuitive to suggest that discounting goods can amount to an unfair commercial practice for the purposes of the Consumer Protection from Unfair Trading Regulations 2008, but if any related advertising constitutes a misleading action or omission (for example, statements which aren’t entirely correct about the price reduction, or which don’t quite tell the whole story around the deal available to customers) [emphasis added to be facetious], which then influences consumer behaviour, then a trader may find itself open to claims from affected consumers.
And what happens if a trader does get it wrong? Well, from a competition law perspective, there is a very real threat of a fine for breaches of competition law (see the Trod example in the link above), as well as other prohibitive sanctions. In terms of the advertising regime, the ASA has the power to make a public ruling against the trader, which may result in considerable negative publicity and, can, in the worst cases lead to further action. And finally, the consumer protection regime in the UK exists to give consumers the ability to seek redress from those traders committing the relevant offence – there is certainly scope for a complaint to result in monetary damages awarded against the trader. Whichever outcome, it is clear that Black Friday has the potential to be a little darker for traders than intended.
If you would like to discuss any of the issues outlined above, please feel free to contact Nicky Broadhurst, Charles Maurice or any other member of the Commercial team at Stevens & Bolton.