Wowcher has seen a significant cut in its profits following a major victory by the UK’s competition watchdog against the e-commerce behemoth.
The London-based firm pledged to the Competition and Markets Authority (CMA) in July of the previous year that it would alter its online selling practices and distribute more than £4m in refunds among 870,000 customers, as reported by City AM.
This commitment followed the watchdog’s launch of an investigation in 2023 due to concerns that Wowcher’s countdown timers and marketing claims – such as ‘Running out!’ and ‘In high demand!’ – could potentially create a false sense of urgency, influencing consumers’ purchasing decisions.
The CMA expressed concern that such ‘urgency’ claims “risk giving the misleading impression that products shortly won’t be available, when this is often not the case.”
Concerns were also raised about Wowcher’s use of pre-ticked boxes to enrol thousands of customers into its paid-for ‘VIP membership’, “which risks customers being signed up without their full understanding.”
Sales fall at acquisitive Wowcher
As a direct consequence of the CMA’s intervention, Wowcher’s pre-tax profit for its most recent financial year – the 12 months to 29 September, 2024, plummeted from £7.9m to £2.3m.
These figures have been disclosed in new accounts submitted to Companies House.
The results also indicate that Wowcher’s turnover fell from £54.7m to £49.5m during the same period.
Wowcher was established by Nicholas Brummitt in 2009 and was purchased by the owner of the Daily Mail in 2022.
A controlling stake in the business was purchased by Exponent Private Equity from DMG Media in 2015 for £29m, with DMG Media retaining a 30% stake.
Wowcher expanded its portfolio earlier this year by acquiring 5pm, a Glasgow-based deals website.
In a statement released in July 2024, Sarah Cardell, Chief Executive of the CMA, 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 £4m.”
