National Advertising Division Recommends Pier 1 Imports Clearly and Conspicuously Disclose Material Terms of Pier 1 Rewards Membership
New York, NY – February 27, 2023 – The National Advertising Division (NAD) of BBB National Programs recommended that Pier 1 Imports Online, Inc., a global importer of decorative home furnishings and gifts that owns and operates the e-commerce website www.pier1.com, clearly and conspicuously disclose the material terms of the Pier 1 Rewards customer loyalty program at the time a consumer adds an item to their cart.
Pier 1 offers Pier 1 Rewards, a subscription-based customer loyalty program for $9.99 that is available to US residents only. The Pier 1 Rewards provides a 10 percent discount on purchases with free shipping included billed on a monthly or annual basis.
When a consumer added an item to their cart, Pier 1 Rewards was automatically added to their cart as a pre-checked button that appeared immediately next to the Pier 1 Rewards logo. The price of the product with the 10 percent discount appeared below the item. Details about the Pier 1 Rewards membership program appeared below the pre-checked box. A consumer had to affirmatively uncheck the pre-checked button to remove the Pier 1 Rewards membership that was added to the cart and not incur the additional membership fee.
Through its routine monitoring program, NAD challenged the accuracy of a listed product price where the advertiser automatically added a Pier 1 Rewards Membership of $9.99/month to the customer’s purchase at checkout. At issue for NAD was whether advertising a reduced price for a product is misleading if it reflects a 10 percent discount that was only available with a subscription to Pier 1 Rewards and whether the material terms and conditions of the Pier 1 Rewards subscription were clearly and conspicuously disclosed before the consumer made a purchase decision.
NAD found that one of the material terms of the rewards program – namely, the autorenewal nature of the Pier 1 Rewards subscription and how to cancel it – was not displayed when the consumer saw the discounted price in their cart.
NAD noted that adding an item to a shopping cart without the consumer affirmatively consenting to purchase the item can be problematic particularly where, as here, the material terms related to the purchase of the item (autorenewal membership and cancelation) were not disclosed when the item was added to the cart.
For these reasons, NAD recommended that Pier 1 clearly and conspicuously disclose the material terms of Pier 1 Rewards at the time the item is added to a cart.
In its advertiser statement, Pier 1 stated that it “agrees to comply with NAD’s recommendation” although it “respectfully disagrees with NAD’s analysis and conclusion” regarding its discount price advertising. The advertiser further stated that “for reasons independent of NAD’s inquiry, Pier 1, even prior to receiving NAD’s decision, modified its advertising in ways that effectively address NAD’s concerns.”
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