Savings claims based upon comparison with comparable merchandise

No. 378. Savings claims based upon comparison with comparable merchandise.

A manufacturer of con1bination color television, radio , and phonograph sets requested an opinion from the Commission in regard to the legality of savings claims based upon the sale of comparable merchandise. Specifically, the manufacturer wanted an opinion in regard to the legality of the alleged savings claim of $300. The manufacturer also wanted to know whether he should identify the three specific competitive manufacturers with which the comparison was being made, or should they be identified merely by referring to them as brand A, B, and C.

In response to the first question the Commission said that because it did not have the facts upon which to base a judgment, it cannot pass upon the legality of the alleged savings claim of $300. The Commission noted that it has laid down rather definitive guidelines for those who wish to utilize savings claims in their advertising which are based upon the sale of comparable merchandise. The Commission directed the manufacturer s attention to Guide 2 of the Guides Against Deceptive Pricing and noted that advertising meeting the requirements outlined in Guide 2 would not be objected to by the Commission. Commenting further upon this question, the Commission said: Basically, Guide 2 outlines two fundamental requirements for determining the validity of savings claims based upon the sale of comparable merchandise. First, the other merchandise must be of essentially similar quality in all material respects to the advertiser s product. Second , the advertiser should be reasonably certain that the price advertised as being the price of comparable merchandise does not exceed the price at which such merchandise is being offered by representative retail outlets in the area. In regard to the second question, the Commission said that it could express no opinion as to whether the manufacturer should identify the three specific competing manufacturers by name or merely identify them by referring to Brand A, B, and C. Its primary concern here, the Commission added, is to make certain that the advertising c1early discloses the basis for the comparison and that the statement is factually true. (File No. 703 7033 Released October 9, 1969)