×

Short-changed! Poundland ads deemed misleading

Poundland – the British retailer known for selling items for £1($1.50) - is in trouble for promoting its namesake price.

The U.K.'s advertising watchdog ruled Monday that the retailer's website was misleading,following complaints that it was selling some products– such as CDs and DVDs – for more than £1.

Customers wait at a check-out counter inside a Poundland discount store in London.
Simon Dawson | Bloomberg | Getty Images
Customers wait at a check-out counter inside a Poundland discount store in London.

"We've told Poundland Ltd that their future advertising must not state or suggest that every item they sold cost £1," the Advertising Standards Authority (ASA) said on its website.

According to the watchdog, Poundland defended its position by saying it clearly identified the products that cost more than the usual £1.

The ASA found an issue with the "Our Values" page on the Poundland website, however, which stated: "Everything for £1 was the idea of our founders in 1990 and we've grown to become the largest single price value retailer in the UK, with over 500 stores...We are very proud to offer you a single £1 price, that hasn't changed since we opened our first store."

Read MorePoundland CEO on Christmas and share price

In October, the ASA similarly ruled that Poundland competitor Poundworld was misleading customers after selling "manager special" items for up to £9.

In an emailed statement to CNBC, Poundland said it had made adequate changes.

"Following advice from the Advertising Standards Authority on the communication of our special promotions on the Poundland website, we have amended the site and made the special promotions clearer."

Its "Our Values" page now includes a section which makes clear that certain items are offered at "other prices."