Recently, a mailer was sent out that advertised a FREE service valued at over $800. A consumer called and asked how it could be free. The answer… “It wasn't.” Sometimes, consumers get so caught up in the excitement of a valuable product or service being offered at a free or reduced rate that they forget to ask this very important question. Of course, the advertisement says “free” so how could it not be, right?
Technically, businesses should not use the word at random, unless you truly mean it. There are exceptions though. Frequently in advertisements, businesses will promote something as being “free,” but then in order to get the product or service, there are accompanying fees. This practice is not uncommon and is used in various industries.
It is not acceptable to mask or to try and hide costs with small print or confusing verbiage. The BBB Code of Advertising specifically says that if a “free” offer is contingent upon another purchase, this fact must be stated “clearly and conspicuously together with the offer.” The use of an asterisk next to the word “free” referencing a footnote is not an acceptable practice.Do you offer anything for free? How do you advertise it?
Small business owners often have to add the title of Advertising and Marketing Director to their long list of duties and may not be aware of the various laws regarding common advertising claims. Creating an effective advertising strategy isn't just about where and when ads are placed, but also what claims are being made.
The following are six examples of commonly used phrases and tactics in advertising that are often misleading when not used properly:
“Free”
The word “free” may be used in advertising whenever the advertiser is offering an unconditional gift. If the shopper has to purchase an item in order to receive the free gift, the advertiser must clearly and conspicuously disclose the conditions. Also, an advertiser may not increase the price of the purchased item, nor decrease quantity or quality in conjunction with the free offer. Additionally, free offers should not be advertised when the item to be sold is customarily a negotiated-priced item such as an automobile or home.
“Save up to…”
Price reduction claims that cover a range of products or services should state both the minimum and maximum savings without a misleading emphasis on the maximum savings. Also, the number of items available at the maximum savings should comprise typically 10 percent of the items being sold unless local or state law requires otherwise.
“Lowest price in town…,” “Our prices can’t be beat…,” etc.
Prices for products and services fluctuate regularly and it can be extremely difficult for an advertiser to claim with certainty that their prices are lower than their competitors. Such claims should be avoided unless the advertiser can provide substantiation.
“Best,” “Most,” “Tops,” and other superlative claims.
Superlative claims can be objective, based on fact, or subjective, based on opinion. Objective claims relate to tangible qualities and performance which can be measured against accepted standards. When making objective claims, an advertiser must be able to substantiate all claims.
Obvious use of puffery, such as an advertiser stating they think they offer the best customer service in town, may not be subject to truth-in-advertising standards. However, advertising is all about trust from the consumer’s perspective and businesses should be vigilant against making subjective superlative claims that are misleading.
“Factory direct,” “Wholesale prices,” “Direct from the maker,” etc.
Claims such as these imply significant savings from the actual price being offered by retailers. These claims should not be made unless the implied savings can be substantiated. Furthermore, claims such as “factory to you” or “factory direct” should not be used unless the advertiser actually manufactures the merchandise or owns the factory where the advertised products are made. Similarly, an advertiser cannot falsely claim to be a wholesaler, nor can an advertiser claim to offer “wholesale prices” or items “at cost” unless the items are being sold at the same price as would be purchased by a retailer for resale.
*Use of Asterisks
Asterisks can be used in advertising if they offer additional information about a word or term that is not inherently deceptive. However, an asterisk or similar reference symbol cannot be used as a means to contradict or substantially change the meaning of the statement. The information referenced by the asterisk should also be clearly and prominently disclosed.
Many products advertised as “green” or “organic” can sway purchasing decisions, but companies can also position themselves as socially conscious at a corporate level to attract customers. Such position begs the question though, what does it mean to be green and how can you communicate it in your advertising?
To help promote your company’s green efforts to all audiences, BBB offers the following advice for making “green” claims in advertising and marketing:
Tell the truth. A recent study by a Canadian-based marketing firm found that many products aren't as earth-friendly as they say they are. While most products reviewed made exaggerated claims, a few carried outright lies – mostly involving supposed certification from watchdog organizations. Few things destroy a company’s credibility with consumers faster than false advertising – tell the truth in all marketing efforts.
Make concrete claims. An honest advertiser will not make vague statements such as “environmentally friendly” or “sustainable” without providing solid examples to back up the claim. If your packaging is made from recycled paper, then say so. If your company has reduced energy costs, then brag about! Making fuzzy claims, however, can get you into trouble with any and all consumer segments.
Provide evidence. Being a green company isn't just about putting a recycling bin by the copier. You also need to be able to explain how you’re making the world a better place. Consider creative ways of quantifying your company’s impact such as: How many hours have your employees volunteered? Who has benefited and how have they benefited from your firm’s efforts.
Get a stamp of approval. While there is no universal “Good Housekeeping Seal of Approval” for green claims, there are independent third-party organizations that will certify your environmentally-friendly statements such as EcoLogo (www.ecologo.org) or Green Seal (www.greenseal.org).
Get expert help. As a result of the green-frenzy, many boutique marketing and advertising firms have sprung up that specialize in branding companies as environmentally friendly and socially responsible. Getting professional PR help is typically costly; however, the rewards could be substantial in terms of revenue, reputation and goodwill.
