NAD Recommends Lowe’s Discontinue 20% Savings Claim for Sale That Excluded Many Major Brands

New York, NY – Nov. 29, 2016 – The National Advertising Division has recommended that Lowe’s Companies, Inc., discontinue the savings claim “Up to 20% Off Appliances $396 or More,” in part because the advertised sale excluded many leading brands.

NAD is an investigative unit of the advertising industry’s system of self-regulation. It is administered by the Council of Better Business Bureaus.

The matter came to NAD’s attention via a consumer who was concerned that the claim as it was originally published was a “bait and switch” attempt. The original claim omitted the “up to” language and stated – “Now get 20% off appliances $396 or more at Lowe’s.”

Upon learning of the error, Lowe’s immediately pulled the advertisement and substituted a corrected advertisement, “Up to 20% Off Appliances $396 or More,” which NAD reviewed.

The claim – “Up to 20% Off Appliances $396 or More” – was accompanied by the following disclosure: “Whirlpool, Maytag, KitchenAid, Amana, GE, LG, Samsung, Frigidaire, Electrolux and Bosch brands limited to a maximum 10% discount, unless otherwise shown.”

NAD noted in its decision that the Federal Trade Commission has held that savings claims involving the phrase “up to,” require that the maximum level of performance claimed can be achieved by an appreciable number of consumers under normal circumstances.

Further, in previous decisions involving “up to” savings claims, NAD has held that to support an “up to” savings claim an advertiser must offer at least 10 percent of the inventory included in the offer at the maximum advertised savings.

In this case, NAD determined that it was unclear whether the claim at issue applied to a significant percentage or meaningful number of products, given that the disclaimer excludes almost every major brand.

In considering the challenged advertising, NAD determined that the disclosure wasn’t clear or conspicuous.

NAD recommended that Lowe’s discontinue the challenged claim, “Up to 20% Off Appliances $396 Or More,” and recommended that, in future advertisements, it obtain appropriate substantiation demonstrating that its “up to” claims apply to a significant percentage or meaningful number of products before publishing the offer.

NAD further recommended that any disclaimer containing material terms and conditions of the offer – including the fact that major brands are excluded – should be 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, in its advertiser’s statement, said the company “agrees to comply with NAD’s recommendations.  Lowe’s is fully committed to ensuring the truth and accuracy of its advertising and appreciates the NAD’s consideration and review of the sale promotion at issue.”

“Lowe’s notes that the NAD’s inquiry did not extend to the consideration of the ratio of sale items in Lowe’s inventory or to the circumstances surrounding the disclaimer that accompanied the television advertisement. Nevertheless, Lowe’s will comply with its above-stated understanding of the NAD’s position regarding ‘up to’ savings claims.  In addition, Lowe’s will disclose material limitations in a clear and conspicuous manner consistent with NAD guidance and agreements with suppliers,” the company said.

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.