Popular promotional tactics will be banned under new standards to be outlined by the Office of Fair Trading next week with retailers facing prosecution and fines if they fail to comply, The Grocer can reveal.

The OFT will look to stamp out seven "misleading" practices identified by consumers in an Ipsos Mori survey in a bid to reduce "noise and obfuscation".

Among the techniques to be banned are:

- extensions to offers beyond the advertised end date
- rollbacks that last longer than sales at the previously indicated price
- baiting (advertising an offer where availability is limited and there is little chance customer expectations will be met)
- masking price rises by using a promotion.

The OFT's interpretation of consumer protection regulations is likely to have major repercussions for the industry, although retailers said they were unwilling to comment until the proposals were published next week. The OFT will invite retailers to a round table discussion on 1 October, with the new rules set to apply from December.

It promised changes would be made to the proposed standards if they created operational problems that made it difficult to offer customers promotions.

The OFT also said traders would be given a period of grace before enforcement began.

"We will give retailers a few months to change their practices after publication," said OFT economist Laura Phaff, "especially as publication is likely to come as the Christmas and January sales marketing are hitting the shelves."

OFT project leader James MacBeth said that the sort of promotions the new rules would tackle included deals that were extended beyond the advertised end date in order to reach sales targets. He added that even if a deal was extended because it was popular, and the retailer offered more stock to carry it on, the OFT would tell retailers they should not have started with a time-limited offer in the first place.

The changes will also limit introductory offers so that a new product can only be offered on promotion for 28 days or less. Under the rules, Morrisons' introductory offer of Walkers Extra Crunchy Crisps for £1, against an rsp of £1.49, would be permissible, but only for a month.

"One of our concerns is consumer confusion about the underlying value of an offer," said MacBeth. "There's also quite a strong competition element because misleading practices make it doubly difficult for genuinely good deals to stand out.

"We want businesses to be able to get their messages out clearly and free of some of the noise and obfuscation that goes on."

Read more
Editor's Comment: Why can’t an offer be extended if it has done well? (28 August 2010)
Will Fingleton fall foul of PM’s civil servant wage crackdown? (5 June 2010)