An ad for Mike Ashley's Sports Direct has been banned for using a "misleading" original price and the retailer has been told to make its delivery charges clearer to online customers.
Sportsdirect.com advertised a pair of Karrimor walking boots in February for £37, with a crossed out price of £84.99 next to it.
A shopper bought the boots in store and found that the price was £41.99, and that they had a label attached showing an earlier price of £79.99.
This prompted a complaint that the crossed out higher price of £84.99 was misleading and it was not possible to buy the boots for £37 either in store or without paying a delivery charge, which is £4.99 for a standard delivery or an in-store collect.
Sports Direct, which is owned by former Rangers shareholder Mike Ashley who is at the centre of a merchandising rights row with the club, said the higher price was a recommended retail price (RRP), and they had a price list from the manufacturer which showed the recommended price for the boots as £85.
Sports Direct said they could demonstrate the cost was a genuine selling price in the market because the same boots continued to be available on Karrimor's website at the price of £84.99.
The retailer also said it was possible for customers to buy the boots for £37 online plus the delivery or collection charge, which they said was clearly displayed.
The Advertising Standards Authority (ASA) ruling raised questions about the delivery charges used by Sports Direct, and its associated websites including USC.
They said consumers would understand that the crossed out price of £84.99 was the usual selling price of the boots at the time the ad appeared, from which Sports Direct were offering a reduction.
ASA said: "We therefore expected to see evidence to demonstrate that £84.99 was the price at which the boots were usually sold by Sports Direct. Because we had not seen any such evidence, we concluded that the ad was misleading."
It also said consumers would assume that there would be no delivery cost for the boots already in stock in physical stores, and that they would cost £37 in shops rather than have the £41.99 price tag which the shopper paid.
The ASA said: "Because it was not possible to obtain the boots for £37, and because the ad did not make clear that £37 was an online price, before delivery, we concluded that the ad was misleading."
Sports Direct has been criticised before about its pricing policies, which some have argued can be misleading.
Two years ago, Sports Direct was warned to clarify its advertising after the regulator banned “misleading” and “unsubstantiated” savings claims.
The retail giant’s website advertised a Puma Arsenal home shirt for £42 in February, claiming the price represented a saving of £17.99.
But a reader said the product had never been sold on Sportsdirect.com at £59.99, and challenged whether the price and savings claim were misleading and could be substantiated.
Sports Direct said the £59.99 claim was based on the recommended retail price of the shirt, and provided a list from manufacturer Puma which showed an RRP for the kit of £60.
It then also submitted a schedule of prices for other clubs, arguing that the evidence demonstrated consistent prices of between £55 and £65 for these types of shirts.
The Advertising Standards Authority said consumers were likely to understand that £59.99 was the price at which the kit was usually sold on Sportsdirect.com.
In 2008, Sports Direct promised not to run confusing or deceptive closing-down sales after it was censured by the former competition regulator, the Office of Fair Trading.
The regulator said it had received complaints from members of the public that Sports Direct had displayed “closing-down” adverts for months at a time.
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