NAD Reviews Discount Claims

Although we’ve seen a steady stream of litigation in recent years focusing on how companies advertise sales, sales haven’t been a hot topic in NAD cases. Last week, however, NAD announced a decision involving Guardian Bikes’ sale practices. Notably, the case was initiated by NAD itself, rather than a competitor, suggesting that we may see more of these cases in the future.

NAD’s inquiry focused on claims such as “40% OFF All Bikes,” “You’ve Got 40% OFF,” and “Sale Ends In” followed by a countdown timer. NAD also reviewed strike-through pricing that compared a current price to a higher reference price. Guardian’s bikes were generally advertised at prices that were roughly 40% below a “Comparable Value” benchmark derived from competitor pricing, rather than 40% below Guardian’s own former prices.