We all like a bargain, don’t we? From coupons to voucher codes, most people want to pay the best price for something if possible. This is where websites like Wowcher come in. Nominally offering the best deals on a range of products, the e-commerce website has risen to prominence in recent years and is one of the most popular deal websites of its kind in the UK. Despite this, Wowcher recently ran into hot water with the Competition and Markets Authority (CMA) over its promotion of products and services to customers.
As a result of action by the CMA, Wowcher will now revise its promotional strategy and be forced into providing £4m in refunds to consumers overall. Let’s look into how Wowcher fell foul of the rules, as well as the action the CMA has taken against them.
Why did the CMA take this action against Wowcher?
The CMA claims that it was forced into taking this action against Wowcher as a result of the promotion of products and services on Wowcher’s website. This included the usage of countdown timers, scarcity claims and countdown claims to pressure customers in making purchases they may otherwise not make. The CMA instead found that the vast majority of prices remained the same following the timer’s completion. Furthermore, the use of pre-ticked boxes signing customers up to its VIP membership was seen as risking people signing up without their full understanding.
The CMA originally launched an investigation into Wowcher last March over the aforementioned concerns, which culminated in the CMA now securing £4m in refunds for consumers.
What was the outcome of the CMA’s findings?
In November of 2023, the CMA wrote a letter to Wowcher which set out their concerns about Wowcher’s practises. They also warned that failure to change their practises would risk potential court action by the CMA.
Due to the outcome of the CMA’s investigation, Wowcher has agreed to the following exact undertakings:
- Only use clear and accurate countdown timers: Timers must not mislead consumers or give a false impression that they have to act quickly to avoid missing out on a deal. Wowcher will also remove its permanent countdown timer at the top of its homepage which states ‘Deals refresh in*: XX:XX:XX:XX’ and counts down to midnight, suggesting those deals may then change or end.
- Make sure all marketing claims are clear and accurate: Claims about the scarcity of a deal – e.g. ‘Almost gone – only 2 remaining!’ – must accurately reflect Wowcher’s remaining stock levels, among other things. Claims about the popularity of a deal – e.g. ‘In high demand!’ [see Figure 3] – must accurately reflect Wowcher’s sales figures, as well as how popular a deal is compared to other similar deals.
- Refund customers who were signed up to ‘VIP membership’ via a pre-ticked box: Wowcher will provide a credit refund – with the option to exchange to cash – to over 870,000 customers and will stop the use of pre-ticked boxes for VIP sign-ups, to ensure customers are fully aware of what they are agreeing to. Based on information provided by Wowcher, the CMA expects refunds for those affected will total over £4 million.
Wowcher must also report back to the CMA throughout the year to ensure that they continue to comply with the above commitments that they signed.
Our thoughts
It is important to note that despite the undertakings which Wowcher agreed to, these were provided to the CMA voluntarily. This is therefore not indicative of any wrongdoing or liability. Only a court will be able to decide whether a breach of the law has occurred.
The decision by the CMA to take action on what they viewed as a flagrant abuse of Wowcher’s promotional strategies will be welcomed by consumers. While it could be argued that the onus should be placed on the consumer to ensure that they are not ripped off, those who are more vulnerable may be more likely to use bargain websites like Wowcher. The creation of a false sense of urgency and scarcity regarding products is therefore necessary to protect such consumers.
The CMA has continued to become more powerful in recent years, with the recently passed Digital Markets, Competition and Consumers Act 2024 further strengthening the body. This legislation will enable the CMA to fine firms that break consumer law up to 10% of their global turnover.
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