870,000 people to get refund from discount deals website Wowcher

Discount deals website Wowcher is to give refunds totalling £4.2 million to 870,000 customers following an investigation by watchdogs.

The move follows action by the Competition & Markets Authority (CMA) which warned Wowcher of legal action if it failed to change the way it operates.

The watchdog also raised questions over the way it attempted to influence customers by using online marketing tactics to pressure them to spend.

These included claims around the scarcity of deals and using a countdown counter on the website to potentially pressure people into spending in order to avoid missing out.

The refunds relate to the fact the Wowcher signed up some 870,000 to its VIP club through a website box that was automatically ticked to accept.

The CMA said Wowcher will now change its sales practices to avoid potentially misleading or unfairly pressuring consumers into making quick purchases.

It has secured undertakings from Wowcher to change its online selling practices – meaning millions of people can expect to see clear and accurate claims about the availability of products and services.

The move comes after the CMA launched an investigation last year over concerns that Wowcher’s countdown timers and marketing claims – such as ‘Running out!’ and ‘In high demand!’ – may create a false sense of urgency and influence people’s purchasing decisions.

The CMA said it is concerned that such ‘urgency’ claims risk giving the misleading impression that products shortly won’t be available, when this is often not the case.

It warned: “These claims, particularly when used with countdown timers, may pressure shoppers to buy quickly for fear they’ll ‘miss out’ – potentially leading to rushed purchases or people spending more than they planned to bag a perceived bargain.”

The CMA said it was particularly concerned that the overwhelming majority of products on Wowcher’s site continued to be available at a similar price once the daily countdown timer has ended.

The organisation was also concerned about Wowcher’s use of pre-ticked boxes to sign thousands of customers up to its paid-for ‘VIP membership’, which risks customers being signed up without their full understanding.

In November last year, the CMA wrote to Wowcher setting out its concerns and calling on the firm to change its practices – or else risk possible court action. As a result, Wowcher has signed formal commitments – known as ‘undertakings’ – meaning it will:

• only use clear and accurate countdown timers: Timers must not mislead consumers or give a false impression that they have to act quickly to avoid missing out on a deal.
• Wowcher will also remove its permanent countdown timer at the top of its homepage which states ‘Deals refresh in*: XX:XX:XX:XX’ and counts down to midnight, suggesting those deals may then change or end.
• make sure all marketing claims are clear and accurate: Claims about the scarcity of a deal – e.g. ‘Almost gone – only 2 remaining!’ – must accurately reflect Wowcher’s remaining stock levels, among other things.
• Claims about the popularity of a deal – e.g. ‘In high demand!’ – must accurately reflect Wowcher’s sales figures, as well as how popular a deal is compared to other similar deals.
• refund customers who were signed up to ‘VIP membership’ via a pre-ticked box: Wowcher will provide a credit refund – with the option to exchange to cash. The refund will be worth around £5 per person.

The CMA’s chief executive, Sarah Cardell, said: “Pressure selling tactics – such as countdown timers and urgency claims that may create a false impression people must ‘Buy now!’ or miss out – can push shoppers into making snap decisions or spending more than they planned.

“Our action will make a real difference for the millions of people who use Wowcher. Consumers who shop on the site can now have more confidence in the claims they see before parting with their hard-earned cash – and hundreds of thousands will soon see refunds, totalling a hefty £4 million.

“We encourage all Wowcher customers to check their emails and texts from the company to keep an eye out for a credit alert – which they can exchange to cash should they wish.”

To ensure Wowcher is complying with the commitments it signed, the firm must regularly report back to the CMA over the coming year.

The investigation into Wowcher forms part of the CMA’s programme of consumer enforcement action focused on ‘Online Choice Architecture’, which is aimed at tackling potentially harmful online selling practices – including pressure selling tactics such as urgency claims.

The watchdog said it has similar ongoing investigations into Emma Sleep and Simba Sleep.

Parliament recently passed legislation to give the CMA stronger consumer powers, which will enable it to decide when consumer law has been broken without taking a case to court.

The Digital Markets, Competition and Consumers Act 2024 will empower the CMA to fine those firms that do break consumer law up to 10 percent of their global turnover.

Wowcher said: “We have voluntarily reached an agreement with the CMA following engagement around our marketing practices. We are pleased that our marketing claims were proven to be factually accurate and supported by real-time data, but are happy to take on the CMA’s feedback to further improve the clarity of our promotions and to enhance our customers’ experience.

"Our marketing claims aim to support our customers when they are browsing our website to help them find the best, exclusive offers from merchants across the UK, and we look forward to continuing to deliver excellent value and choice for our customers.

“Wowcher has agreed to offer refunds to certain customers who signed up to the VIP loyalty programme, and will credit these customers with £4.99 into their Wowcher wallet over the coming weeks. We hope that our customers can put this to good use as they seek out their next great offer on Wowcher.”