When doing your shopping, you have surely encountered so-called ‘bonus packs’: products in enlarged package sizes, with the extra bit of product for free. The producer offers this extra product in an attempt to tempt you, the consumer, to buy it. So far, so good.
But what if the bonus pack suggests that the extra volume of product that has been added is larger than it actually is? The product package may contain a banner in a different colour which states “+10% for free”. If this banner takes up, say, almost 30% of the packaging, it may seem as if the extra volume that you get is larger than it actually is. Can this be considered a deceptive practice?
This question has been put forward in a law suit. In deciding on this, the European Court of Justice also established a stylized consumer image, called the “average consumer”, which has ever since been used as a benchmark for all marketing laws in the European Union (EU). This “average consumer” is supposed to be reasonably well-informed, reasonably observant and circumspect. The aim of this benchmark is not to reflect reality, but rather to create a level playing field across the EU, which can be applied to all countries. If a stricter benchmark is needed, Member States can protect consumers according to national law.
What is currently not included in the consumer benchmark of lawyers are the predictable and systematic biases in consumer decision making that behavioural economics and consumer research have discovered. Certain marketing practices can and will influence consumers regardless of cultures and settings protected by national law, but lawyers currently do not take this into account when making their decisions.
In the example of the bonus packs, consumers are likely to overestimate the volume that they get for free, due to the anchoring bias. Consumers look at the coloured area on pack (the anchor) and this influences their estimate of how much extra volume they receive. Anchoring is a one of the most robust biases in decision making, which has often been shown and has replicated (see the many labs project).
In a recent paper published in the Journal of Consumer Policy, Kai Purnhagen and Erica van Herpen provide empirical support that consumers are indeed deceived by oversized coloured areas on pack for the extra free volume, in a small-scale experiment. Consumers think they get more product for free than they actually do. Based on this, Kai Purnhagen and Erica van Herpen argue that the EU law could take robust biases in consumer decision making in mind, and adjust the current consumer benchmark to include behavioural insights.
In other words, insights from behavioural studies can inform regulators about the effects of commercial practices on consumer perceptions, and these insights are relevant for them to consider. This may or may not change actual decisions, depending on how these insights are weighed against other important factors (such as the principle of free movement of goods). Whether regulators will take up this challenge of including behavioural insights into their decision making, is currently a point of discussion in the REFIT programme regarding the EU marketing law. We eagerly await the outcome.