Although the OFT made clear that at this stage, ‘it should not be assumed… that any breach of consumer protection legislation has occurred’, it is investigating high street carpet and furniture retailers for ‘engaging in the use of misleading reference pricing. Ie artificially inflating prices, then knocking them down to make them look as if they’re on sale.
It has written to six companies, which it wouldn’t name – although trade mag Retail Week has named them as Carpetright, DFS, Dreams, SCS, Furniture Village and Harveys/Bensons for Beds.
According to the OFT, many of the stores in question used sale-esque language – ‘was £500, now £300’ – on products that had never been sold at the higher price in the first place. In fact, it said that on average 95% of the products on sale at the stores were being sold at the lower ‘now’ price.
Its concern is fair: we all know consumers are more likely to buy if they think they’re getting a bargain. It’s the same thinking employed in ‘buy one get one free’ offers, to persuade people to buy more of something, even if they don’t really want it.
As the OFT’s Gaucho Rasmussen pointed out: ‘Reference pricing can mislead consumers into thinking the item they have bought is of higher value and quality. Buying an item immediately means they do not get the chance to search the market for the real best deals.’
Carpetright was quick to issue a statement saying it ‘strives to operate fully within all laws and regulations at all times’ and that there is ‘no suggestion of Carpetright having behaved in a manner which breaches competition law’.
Still: it’s the broadcasters we’re worried about in all this. How will Channel 5 fill its ad slots without DFS, Furniture Village et al droning on about the bargains to be had on leatherette sofas?