This past week, several consumer actions made headlines that affect the retail industry.
Department Stores Settle False Discount Claims
Ann Taylor and its parent company, Ann Inc., have entered into settlements amounting to approximately $6.1 million in two unrelated cases alleging false discounts. Ann Inc. settled allegations that it offered misleading “discounts” on clothes sold through its Ann Taylor Factory and LOFT stores. According to the complaint, the stores claimed to sell goods “marked down” from prices that never actually applied to the goods in question.
The Neiman Marcus Group LLC also has reportedly reached a settlement over similar claims; details of this settlement currently are not available to the public.
War of the Robots Averted after Eufy Agrees to Discontinue Challenged Claims
After a challenge before the NAD by iRobot, the maker of the Roomba robotic vacuum cleaner, competitor Eufy has agreed to halt a number of challenged advertising claims. iRobot challenged claims from Eufy’s website, as well as from an online retailer’s listing of the RoboVac 11 Model T2101.
The NAD’s inquiry looked at iRobot’s factual assertions (the RoboVac 11 has a HEPA-style filter) and its implied claims (the filter in the RoboVac 11 meets HEPA performance requirements). In response, Eufy decided to discontinue the challenged claims; the NAD will treat this decision as if it had recommended that the claims be discontinued and the advertiser complied.
Alcon Sheds Tears (and Certain Ad Claims) after Challenge by Bausch & Lomb
After a challenge by rival contact lens solution manufacturer Bausch & Lomb, the NAD has recommended that Alcon Laboratories, Inc., discontinue claims about its Clear Care and Clear Care Plus contact lens solutions.
Both Alcon and Bausch & Lomb sell solutions meant to clean and disinfect contact lenses. There are two major types of solutions: hydrogen peroxide-based solutions and multipurpose solutions (“MPS”), which rely on non-peroxide chemicals to disinfect lenses. Alcon’s products are peroxide-based, whereas Bausch & Lomb makes competing MPS products. Bausch & Lomb challenged claims suggesting that MPS solutions were inferior to Alcon’s solutions. Additionally, Alcon claimed that its solutions were “more like natural tears” because they did not contain preservatives.
Alcon agreed to discontinue certain claims at the outset of the investigation. The NAD recommended that Alcon discontinue a number of other claims, including “Preservative free to be more like natural tears,” and the claims that its products were better at disinfecting contact lenses compared to Bausch & Lomb’s products. The NAD found that Alcon’s claim of “long-lasting moisture” was supported by evidence and could continue.
ERSP Recommends Meal Delivery Service Modify or Discontinue Certain Claims
After investigating an anonymous complaint, the Electronic Retailing Self-Regulation Program (“ERSP”) has recommended that Sun Basket, Inc., modify or discontinue claims relating to its meal delivery service. Sun Basket claims that its food products are “healthy,” “organic” and “lean and clean.” According to the complaint, parts of Sun Basket’s website suggested that all of its products were organic, and the claims about food being “healthy” did not explain why any given foods were healthy.
After ERSP began its investigation, Sun Basket voluntarily changed its marketing, including clarifying that not all of its products are organically produced. Despite the voluntary changes, the ERSP determined that Sun Basket’s claims still failed to adequately communicate that it uses organic ingredients wherever possible.
Separately, ERSP determined that Sun Basket’s use of the words “healthy” and “clean” were not inappropriate, and did not recommend any additional action.