Circle K, the convenience store chain, advertised that consumers who bought two packs of certain cigarettes would receive a discount on their purchase, saving them approximately $1 to $1.50 per purchase. Apparently, when consumers bought cartons of those cigarettes (which typically contain ten packs), the store didn't give them the discount, however. Does a discount offered on the purchase of two packs of cigarettes also apply to the purchase of ten packs? That's the issue in a recent lawsuit that was brought against Circle K in federal court in California.
The plaintiff in the lawsuit claimed that Circle K engaged in false advertising (in violation California law), alleging that he understood the advertising to mean that the two-pack discount would also apply to the purchase of cartons as well. Circle K moved to dismiss, arguing that (1) it is implausible that a "reasonable consumer" would be deceived by its advertising, (2) reasonable consumers would understand that a two-pack discount doesn't apply to carton sales, and (3) reasonable consumers could have looked at the receipt, after the purchase was completed, and if they were deceived, could have asked for a refund and a new transaction. The court denied the motion, holding that -- at least for the purposes of a motion to dismiss -- the plaintiff has sufficiently pled his claims.
Pointing to the fact that the advertising does not expressly exclude purchases of cartons, the court didn't buy Circle K's argument that reasonable consumers would necessarily understand the offer.
The court also didn't buy Circle K's argument that consumers would understand that purchases of cartons already include built-in discounts and that, therefore, the two-pack discount would not apply. The court wrote, "Reasonable consumers could plausibly think that the advertised discount would be stacked upon the bulk discount."
In addition, the court held that, at least at the motion to dismiss stage, it wasn't relevant that a consumer could have viewed the receipt and then decided to take action after the fact. The court wrote, "It is plausible would nonetheless buy at the inflated price, despite his or her better judgment, even after viewing the receipt, because he or she is now invested in the decision to buy and swept up in the momentum of the events."
While this case is still at the very preliminary stages, it does provide some useful things for marketers to think about when developing offers.
- Don't assume that consumers will interpret your offers the way you do. Consider all of the possible (reasonable) interpretations, and if there are other potential take-aways, consider modifying the offer, or including a clear and conspicuous disclaimer that explains exactly what you mean.
- It's also important to consider your offers in the context of all of your offerings and your advertising as a whole. While an offer may be clear in one context, when viewed in other contexts, it may not.
- If there are material offer terms, it's critical that you disclose those terms clearly and conspicuously, in close proximity to the offer. If a discount applies only in certain situations, or if there are other limitations (such as one per customer), it's important to get that information in front of consumers as early as possible.
- Don't assume that the argument, "consumers will understand what we really mean here," is going to win the day, when there are other plausible interpretations of your claims. Plaintiffs don't actually have to show that much confusion in order to demonstrate that advertising is misleading.
- Once a consumer has been misled, it's unlikely that you're going to be able to cure that confusion after the fact. Courts (and regulators!) are not likely to determine that disclaimers that are provided later on, or information that is provided at the time of (or even after) purchase, will cure consumer confusion that has already occurred.
- Receipts are a great way to memorialize what you've already told consumers, but I wouldn't recommend relying on them to provide information to consumers that they actually should have received well before they made the purchase.
Petterson v. Circle K Stores, 2021 WL 1749899 (S.D. Cal. 2021).
"Reasonable consumers could plausibly think that the advertised discount would be stacked upon the bulk discount"