Carphone Warehouse not “commission-free”, says ASA
The Carphone Warehouse has been rebuked for claiming it doesn’t pay its staff commission.
National press adverts for the retailer claimed its staff were on “0% Commission” and offered “100% impartial advice”. However, that was challenged by one complainant, who claimed staff were given bonuses based on the sales performance of their individual store, which was effectively commission and thus meant staff couldn’t be entirely impartial.
In its defence, Carphone said “the notional margin target” set for individual stores “was generally not a reflection of the actual profit made by Carphone Warehouse in relation to the individual items or services sold, other than in the field of accessories,” which Carphone claimed accounted for a tiny proportion of its overall sales.
Carphone added that “the actual profit margins on individual products were not circulated below directorate and senior management levels and that branch managers and staff would not, therefore, be able to ascertain the profit margin on individual products or services.”
Having examined Carphone Warehouse’s sales data, the Advertising Standards Authority (ASA) concurred that “staff would not be able to ascertain the profit margin on individual products or services,” and so agreed that claims of impartiality were fair.
However, the ASA was less impressed with the “0% commission” claim, noting that “the amount an individual consultant received was based to a large extent on that individual’s contribution to the extent to which their branch had met their notional margin (sales) target”.
The retailer was told not to repeat the zero commission claim in future advertising.