Wowcher: Profit slashed after huge refund over pressure selling tactics
Profit at Wowcher has been slashed after the UK’s competition watchdog scored a major victory against the e-commerce giant.
The London-based business promised the Competition and Markets Authority (CMA) in July last year that it would change its online selling practices and hand 870,000 customers a share of more than £4m in refunds.
The move came after the watchdog launched an investigation in 2023 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 was 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 was also worried 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”.
Sales fall at acquisitive Wowcher
As a direct result of the CMA’s intervention, Wowcher’s pre-tax profit for its latest financial year – the 12 months to 29 September, 2024, was slashed from £7.9m to £2.3m.
The figures have been revealed in new accounts filed with Companies House.
The results also show that Wowcher’s turnover declined from £54.7m to £49.5m over the same period.
Wowcher was founded by Nicholas Brummitt in 2009 and was acquired by the owner of the Daily Mail in 2022.
DMG Media then sold a majority stake in the company to Exponent Private Equity for £29m in 2015, retaining a 30 per cent minority share.
Earlier this year, Wowcher acquired Glasgow-based deals website 5pm.
In a statement released in July 2024, 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 £4m.”