Advertisers love to entice consumers with offers of free products. “Buy One Get One Free!” “2 for 1 Sale!” “Your First Issue is Absolutely Free!” “For a Limited Time Get 50% Off with the Purchase of Two or More!”
The Federal Trade Commission, the organization charged with issuing industry-wide regulations that advertisers must follow, takes free product and service promotions very seriously. To illustrate just how seriously the FTC takes the use of “free” offers as a promotional device, one only need to know that an entire section (Part 251) of Title 16 of the Code of Federal Regulations is devoted to the use of the word “free” and similar representations in advertising.
The reason the FTC is so concerned with such offers is because, in the FTC’s view, consumers, in their quest for the best buy, regard the offer of “free” merchandise or services to be a special bargain. Accordingly, all such offers must be made with extreme care so as to avoid any possibility that consumers will be misled or deceived. Such offers must be made in strict compliance with the law and the FTC’s special guidelines for free offers.
The full FTC guidelines for free offers can be found at the FTC’s website.
The following is a summary of some of the most important rules of the road:
• All terms, conditions, and obligations must be set forth clearly and conspicuously at the outset of the offer (asterisk footer language is not sufficient)
• An item is only free if there is normally a charge for that item
• The “regular price” item that must be purchased in order to get the free item must be the true regular price of the item and not an inflated price
• The “free offer” cannot be the customary offer, it must be special, and therefore it must be limited in time and percentage of sales
• Introductory offers must be truly introductory and should generally not last more than 6 months
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