Poundland's divisive #ElfBehavingBad social media campaign, which included images of an elf "teabagging" a female doll and another of him thrusting a toothbrush between his legs, has been banned by the advertising watchdog.
Eighty-five people complained to the Advertising Standards Authority (ASA) about the campaign, which ran in December in the run-up to Christmas. On most days of Advent, a different, sexually suggestive, image using an Elf on the Shelf doll was posted.
The adverts have been banned from being repeated by the ASA for being "irresponsible".
The ASA said: "The ads must not appear again in their current form. We told Poundland Ltd to ensure that their advertising was presented with a sense of responsibility and did not cause serious or widespread offence."
The ASA cited nine separate posts from Poundland's Facebook and Twitter pages, all featuring the toy elf, sometimes alone, sometimes alongside other dolls.
The ASA examined the image that launched the campaign. It showed the elf dangling a teabag over a doll's face - a blatant reference to teabagging, a sexual act in which a man puts his scrotum into another person's mouth.
The ASA ruled that the image could be seen as "demeaning" to women.
Another Facebook picture, also found to be demeaning, showed a group of unclothed dolls playing what appeared to be strip poker captioned with the phrase "I really want to poker".
Poundland argued that the posts were created by an all-female team and were received equally well by male and female customers. The company also claimed that "most reasonable people would assume the owner of the teeth held more power than the owner of the teabag".
Other images showed the elf offering "free moustache rides", an implied reference to oral sex, and the elf waving a vibrator saying "My lightsaber is bigger than yours".
The ASA concluded that the images "which depicted the toy figures in a sexualised manner and appeared in an untargeted medium where they could be seen by children, were irresponsible and were likely to cause serious or widespread offence".
In its defence, Poundland said the images were "based on humour and double entendre". In a letter to the ASA, head of marketing Mark Pym wrote: "We are sure our Elf campaign was based on one of the things that makes us British – humour based on double entendres that go over the heads of those that don't understand them and make those that do, laugh out loud.
"In our view, a love of this kind of humour is uniquely British – from the first pantomime in the 1700s to the 1930s invention of the saucy seaside postcard, to Carry On films from the 1960s and 1970s.
"In any event, while the nature of a double entendre is that it won't be understood by children, as you will be aware, Facebook and Twitter have policies that prevent under-13s from creating accounts on their websites and I'm happy to confirm that we have never sought to encourage anyone other than adults to follow Poundland on those social networks."
Poundland claimed that 82% of a 12,000-strong sample audience supported the campaign, according to a Twitter poll conducted by comedian Jason Manford. "They stated a large number of people found the campaign to be humorous, engaging, and in line with what it meant to be British," the ASA report said. "They stated they did not intend to offend anyone."
The Poundland elf even issued this statement from his cell in "Wormwood Scrubbers" following the ASA complaints. It said: "Britain's the home of saucy postcards, Carry On films and panto, so I'm sad the ASA found my double entendres hard to swallow.
"At least it's only 84 people who had a sense of humour failure compared to the tens of thousands who got the joke and liked and shared my posts online.
"I'm doing everything I can to be good so I can get out on good behaviour later this year. Love, Elfie x"