Smallbusiness owners often have to add the title of Advertising and MarketingDirector to their long list of duties and may not be aware of the various lawsregarding common advertising claims. Creating an effective advertising strategyisn’t just about where and when ads are placed,but also what claims are being made and Better Business Bureauis providing guidance about some advertising phrases that can be misleading ifnot used properly.
“Advertisingregulation issues are not necessarily something small business owners are awareof, but lack of knowledge of truth in advertising laws is not a defense and anybusiness owner engaging in advertising should familiarize themselves with BBB’sguidelines to help avoid inadvertent violations,” said Nancy B. Cahalen,President and CEO of Better Business Bureau of Central New England.
Followingare six examples of commonly used phrases and tactics in advertising that areoften misleading when not used properly:
The word“free” may be used in advertising whenever the advertiser is offering anunconditional gift. If the shopper has to purchase an item in order to receivethe free gift, the advertiser must clearly and conspicuously disclose theconditions. Also, an advertiser may not increase the price of the purchaseditem, nor decrease quantity or quality in conjunction with the free offer.Additionally, free offers should not be advertised when the item to be sold iscustomarily a negotiated-priced item such as an automobile or home.
Pricereduction claims that cover a range of products or services should state boththe minimum and maximum savings without a misleading emphasis on the maximumsavings. Also, the number of items available at the maximum savings shouldcomprise typically 10 percent of the items being sold unless local or state lawrequires otherwise.
“Lowestprice in town…,” “Our prices can’t be beat…,” etc.
Pricesfor products and services fluctuate regularly and it can be extremely difficultfor an advertiser to claim with certainty that their prices are lower thantheir competitors. Such claims should be avoided unless the advertiser canprovide substantiation.
“Best,”“Most,” “Tops,” and other superlative claims.
Superlativeclaims can be objective, based on fact, or subjective, based on opinion.Objective claims relate to tangible qualities and performance which can bemeasured against accepted standards. When making objective claims, anadvertiser must be able to substantiate all claims.
Obvioususe of puffery, such as an advertiser stating they think they offer the bestcustomer service in town, may not be subject to truth-in-advertising standards.However, advertising is all about trust from the consumer’s perspective andbusinesses should be vigilant against making subjective superlative claims thatare misleading.
“Factorydirect,” “Wholesale prices,” “Direct from the maker,” etc.
Claimssuch as these imply significant savings from the actual price being offered byretailers. These claims should not be made unless the implied savings can besubstantiated. Furthermore, claims such as “factory to you” or “factory direct”should not be used unless the advertiser actually manufactures the merchandiseor owns the factory where the advertised products are made. Similarly, anadvertiser cannot falsely claim to be a wholesaler, nor can an advertiser claimto offer “wholesale prices” or items “at cost” unless the items are being soldat the same price as would be purchased by a retailer for resale.
Asteriskscan be used in advertising if they offer additional information about a word orterm that is not inherently deceptive. However, an asterisk or similarreference symbol cannot be used as a means to contradict or substantiallychange the meaning of the statement. The information referenced by the asteriskshould also be clearly and prominently disclosed.
For moreguidance on advertising, see BBB’s Code of Advertising. Small business owners and consumers can file acomplaint regarding questionable advertising claims with the BBB of Central NewEngland, here.
Moreadvice and guidance on small business management and becoming a BBB AccreditedBusiness is available online, at the BBB ofCentral New England’s website.