Making a statement about "up to" claims, the National Advertising Division recommended that Lowe's discontinue using the savings claim "Up to 20% Off Appliances $396 or More."
A consumer tipped off the self-regulatory body about the claim and complained that while it implied that all appliances would be discounted, a hard-to-read footnote excluded virtually all the popular major brands of appliances. The footnote listed various appliance brands followed by "brands limited to a maximum 10% discount, unless otherwise shown." This hidden limitation rendered the claim a "bait and switch" advertisement, the consumer said.
The NAD reviewed its position on "up to" claims in light of a Federal Trade Commission ruling that such claims "require that the maximum level of performance claimed can be achieved by an appreciable number of consumers under circumstances normally and expectably encountered by consumers."
In addition, the NAD has also established in prior decisions that for "up to" savings claims, the number of sales at the maximum savings should comprise a "significant percentage" of all items in the offering and that to support such a claim an advertiser must offer at least 10 percent of the inventory included in the offer at the maximum advertised savings.
Applying these standards, the decision found the record unclear as to whether Lowe's claim applied to a significant percentage or meaningful number of offerings, particularly given the exclusion of "almost every major brand."
The NAD also found the advertiser failed to adequately disclose the limitations of the offer, as the terms were not "clear and conspicuous," a standard defined as disclosures "displayed in a manner that is readily noticeable, readable, and/or audible, and understandable to the audience to whom it is directed," considering factors such as "the size of the font, the duration that the super appears on screen, the extent to which it contrasts with the background, as well as surrounding visuals and sounds that may distract a viewer's attention away from the super."
"Here at the same time that the Lowe's disclaimer appears fleetingly, in a small font at the bottom of the screen, prominent graphic elements (images of appliances) also appear in the middle of the screen," the NAD wrote. "The viewer's eye is naturally drawn to the more prominent graphics and thus, it is likely that consumers' attention would be drawn away from the disclosure."
For all of these reasons, the self-regulatory body recommended that Lowe's discontinue the challenged claim. As for future advertisements, the company should "obtain appropriate substantiation demonstrating that its 'up to' claims apply to a significant percentage or meaningful number of offerings before publishing the offer," the NAD advised. It further recommended "that any disclaimer which contains material terms and conditions of the offer (e.g., including the fact that major brands are excluded) should be sufficiently clear and conspicuous and appear in immediate proximity to the triggering claim so that consumers are likely to notice, read and understand it."
Lowe's agreed to comply with the NAD's recommendations.
Why it matters: The decision offers a valuable primer on the necessary support for "up to" savings claims, including that "the maximum level of performance claimed can be achieved by an appreciable number of consumers under circumstances normally and expectably encountered by consumers." Advertisers should also note the NAD's reminder that regardless of format they must be "clear and conspicuous" and "displayed in a manner that is readily noticeable, readable and/or audible, and understandable to the audience to whom it is directed."