"National Reference Retail" price on watches not substantiated
Everyone loves a bargain, so it’s very appealing when a product is advertised at a much lower price than a comparison price quoted in the advertisement. The offer can be misleading, however, if the comparison price in the ad isn’t an actual selling price for the product.
The BBB has found that Sweepstakes Clearinghouse, a national mail order business based in Dallas, advertises a comparison price for one product that appears to be inflated. Xavier brand diamond watches advertised with a “National Reference Retail” price of $449.95 were determined to be of lower quality than the merchandise used for the comparison price.
Better Business Bureau standards for advertising call for comparison prices to be “actual retail selling prices for the merchandise in the area."
The BBB Code of Advertising notes that "reference price" and similar terms have sometimes been used deceptively to state or imply a saving which was not, in fact, the case.
The BBB Code of Advertising provides that, "A list price may be advertised as a comparative to the advertised sales price only to the extent that it is the actual selling price currently charged by the advertiser or by representative principal retailers in the market area where the claim is made. Such a comparison should be substantiated by the advertiser immediately prior to making any advertised comparison."
Sweepstakes Clearinghouse, 1555 Regal Row, Dallas, mails offers to consumers across the U.S. for merchandise such as computers, cameras, luggage, watches and more. The advertisements state “National Reference Retail” comparison prices for the products.
One mailing offered “23 Karat Gold and Genuine Diamond Watches” by Xavier Fine Diamond Watches in Gold and Two-Tone, with quartz movement, in both men’s and women’s styles. The ad claimed a “National Reference Retail” price of $449.95 each. Each watch was said to have “Eight (8) Genuine Diamonds on Bezel”. The gold style was described as “Richly plated in 23K Gold”, and the two-tone style as “Stainless Steel and Richly plated 23K Gold”.
The watch offer says the recipient has been "awarded a consolation prize" which is a $400 credit voucher towards the purchase of one of the four watches offered. That brings the total price of the advertised Xavier watches valued at $449.95 to just $49.95 plus shipping and handling.
On July 21, 2009, as part of its review of advertising, the BBB requested that Sweepstakes Clearinghouse substantiate the "National Reference Retail" comparison prices for products featured in its mailings.
Sweepstakes Clearing House provided information, however, after reviewing the submitted materials, the BBB became concerned that there were inaccurate product comparisons which inappropriately inflated the reference prices of one of its products.
The BBB determined that the advertised Xavier Diamond Watches are not of the same product quality as the comparison products referenced in materials submitted by Sweepstakes Clearinghouse to the BBB in Dallas. The BBB concluded that the company failed to provide adequate substantiation materials for the "National Reference Retail" price for the advertised Xavier Diamond Watches.
This failure to substantiate an advertised comparison price is one of the reasons that Sweepstakes Clearinghouse has a BBB rating of “F”, on a scale from A+ to F. Additional reasons for this rating include:
- 311 complaints filed against the business
- Business has failed to resolve underlying cause(s) of a pattern of complaints.
Customer complaints allege slow delivery of ordered merchandise, non-receipt of refunds, poor product quality, and unsatisfactory customer service. The company has resolved some complaints by offering refunds, making deliveries, or explaining its policies.
Mailings from Sweepstakes Clearinghouse state that the recipient has been awarded a consolation prize, which is a credit voucher good towards the purchase of merchandise. Consumers pay the balance of the price for the product they choose, plus shipping and handling.
To check out a business or file a complaint, start at www.bbb.org.