Discounts must be genuine, says OFT

The Office of Fair Trading has published draft guidance on advertising discounts in the wake of a landmark ruling against the Officers Club clothing chain which deemed a permanent "70% off" advertising strategy to be misleading and in breach of the law.

The High Court ruled against Officers Club Ltd last May, finding it in breach of the Control of Misleading Advertisements Regulations of 1988. It established that if retailers advertise discounts from their own previous prices, the previous prices must be genuine prices. One of the features of a genuine price is that the retailer must honestly believe that the goods can be sold in significant numbers at that price.

The draft guidance is now out for consultation until 24th August 2006. It explains the legal obligations of retailers using non-broadcast advertising to publicise reductions from their own previous prices.

Christine Wade, OFT Director of Consumer Regulation Enforcement said: "'When finalised this guidance will be available to help retailers understand and comply with the law and will give confidence to consumers that bargains are genuine."