BBB National Programs Archive
NAD Recommend Discover Modify Chart of Comparative Cash-Back Card Benefits Following Challenge by Chase Bank
New York, NY – May 31, 2017 – The National Advertising Division has recommended that Discover Financial Services LLC modify certain claims made in a chart that compares the advertiser’s Discover It credit card to five competing cards, including the Chase Freedom Unlimited card. The claims at issue were challenged by Chase Bank USA, N.A.
NAD is an investigative unit of the advertising industry’s system of self-regulation. It is administered by the Council of Better Business Bureaus.
Challenged claims included:
- Discover It Cardmembers earn “1% or more” cash back on base purchases that are ineligible for 5% cash back
- Chase Freedom Unlimited cardmembers earn “1% or more” cash back on base purchases that are ineligible for 5% cash back.
- Chase Freedom Unlimited cardmembers cannot redeem their rewards for cash back “in any amount.”
- Chase Freedom Unlimited cardmembers cannot redeem their rewards for cash back “at any time.”
NAD also considered whether the advertising at issue implied that:
- Chase Freedom Unlimited cardmembers do not receive any new cardmember bonus.
- Chase does not offer a rewards card that provides cardmembers the opportunity to earn 5% cash back on bonus categories of purchases.
- Discover’s cash rewards program is superior to Chase’s.
The challenge in this case centers on a chart on Discover’s website titled, “Compare credit cards and see how Discover stacks up.” The chart lists certain benefits of cash-back cards and indicates whether a card does or does not provide a benefit through the use of either a positive check mark or a negative “x.”
Chase contended that certain claims within the chart are misleading and that the chart, as a whole, conveys the misleading message that Discover is superior to all other cash back credit cards.
As NAD noted in its decision, cash-back rewards cards have gained increasing popularity since NAD first reviewed comparative claims made for a cash rewards programs and NAD’s initial guidance remains instructive: “Given the vast array of cash rewards programs available, the question of which rewards card is the best is very complicated and often turns on the needs and buying habits of the cardholder.”
Following its review, NAD recommended that the advertiser modify the chart to make it clear that its modified 1% cash back claim is not related to the claim “cash back on every purchase.” NAD also recommended that Discover clearly and conspicuously disclose material differences between its cash back benefits and those of competing cards by using a well-labeled hyperlink beside the claim “cash back on every purchase.”
To avoid consumer confusion, NAD recommended that Discover modify its chart to avoid conveying the message that competing cards do not offer new member bonuses and make clear that the exclusive features of its new cardmember benefit are the availability of the card without a spending threshold and the unlimited match of the cash back earned at the end of the first year of membership.
NAD recommended that the advertiser separate the claim “Redeem your rewards in any amount” from the claim “Redeem your rewards at any time” to avoid conveying the message that competing cards, including the Chase Freedom Unlimited card, do not allow cardmembers to redeem rewards in any amount.
NAD recommended that Discover modify its advertising chart to clearly and conspicuously disclose if Chase or other competitors offer cards with 5% cash back in rotating categories each quarter and 1% cash back on all other purchases.
Finally, NAD concluded that the Discover chart did not convey an overall superiority claim.
Discover, in its advertiser’s statement, took issue with certain of NAD’s finding. However, the company said, it “respects the self-regulatory process and intends to modify its advertising taking into account NAD’s recommendations.”
Note: A recommendation by NAD to modify or discontinue a claim is not a finding of wrongdoing and an advertiser’s voluntary discontinuance or modification of claims should not be construed as an admission of impropriety. It is the policy of NAD not to endorse any company, product, or service. Decisions finding that advertising claims have been substantiated should not be construed as endorsements.