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If no sales had been made at that price, the advertiser must be sure that the markup on the higher priced product is similar to other products. Comparison with current price of identical products or services sold by others. Advertisers must be reasonably certain that the compared to price does not appreciably exceed the price at which substantial sales for the identical product have been made. Advertisers must be reasonably certain that the compared to price does not appreciably exceed the price at which substantial sales for the comparable product have been made.
List prices comparisons may mislead the consumer where they are not to a price at which substantial sales of the product have occurred. An advertiser can use a list-price non-deceptively where it does not claim a savings, and includes certain disclosures. A price comparison to an imperfect product must include a clear disclosure, among others, that such comparison applies to the price of the product if perfect.
Such phrases are appropriate under certain circumstances. At the end of the sale period, retailers can, in good faith, convert the sale price to a new regular price if they no longer claim a savings. Emergency sales must be for a limited period of time, and only include products that are affected by the emergency. The reason given for the sale must be true. Advertisers stating they are closing out a particular product can do so where the advertiser will no longer carry that product.
Advertisers may want to include a disclosure of both the minimum and maximum savings available to provide more information to consumers. Advertisers should avoid making unqualified lowest prices claims.
One appropriate qualification is to promise truthfully that the advertiser will meet or beat a lower price sold by others. When advertisers offer a price match guarantee, the offer should be made in good faith, include all necessary information to take advantage of it, and not place unreasonable burdens on the consumer who wants to take advantage of the offer. When offered with the purchase of another item, the free item should not be paid for by an increase in the regular price of the other item.
Offering credit to consumers comes with numerous requirements which must be met. To avoid confusion, the existence of any extra charges such as delivery, assembly, postage and handling, etc. Advertisements for a product or service that include an offer to sell consumers additional goods or services under a negative option should disclose all material terms of the negative option. Advertisers should avoid making vague or unnecessarily long disclosures that might include contradictory language.
Advertisers should avoid such offers. Asterisks can be used to provide additional information about the product or service. However, they should not be used to contradict or change the meaning of the original claim.
Only commonly known abbreviations should be used in advertising. Advertisers should use them only in those circumstances and with appropriate disclosures. Comparisons should fairly reflect all aspects of the products or services equally.
Claims that relate to tangible qualities and performance values of a product or service can be used when the advertiser has substantiation. Expressions of opinion or intangible qualities of a product or service do not need to be substantiated. Advertisers should ensure that testimonials and endorsement are not misleading and represent the current opinion of the endorser. Advertisers should not include claims in testimonials that they themselves cannot make and support.
Rebates are payments of money after the sale. Advertisers should clearly and conspicuously state the before-rebate cost as well as the amount of the rebate and include key terms that consumers need to know. Business names or trade styles should not contain words that would mislead the public.
Advertisers should publish clear, complete and concise contest rules and provide competent impartial judges to determine the winners. Contests that include the three elements of prize, chance and consideration payment are considered lotteries in violation of state and federal laws.
Canadian law contains similar prohibitions. Claims relating to performance and results should be backed up by reliable evidence. Advertisers should disclose when merchandise requires partial or complete assembly by the consumer, e. Environmental Certifications and seals of approval may be used if properly issued.
Additional disclosures are needed if not issued by an independent third-party. In general, all or virtually all of the product must be made in the USA. Native Advertisements are created to resemble the design, style, and functionality of the media in which they are disseminated, which could make it difficult to distinguish between advertising and non-commercial content.
BBB promotes honest advertising by working with businesses to help ensure ethical and truthful advertising. Contact your BBB at bbb.
If BBB has developed specific industry advertising codes, it is recommended that industry members adhere to them. In all instances, advertisers, agencies and media should also be sure that they are in compliance with local, state, federal and provincial laws and regulations governing advertising. These standards apply to advertising placed in all forms of media, including print, broadcast, online and mobile formats.
Adherence to the general principles and specific provisions of this Code will be a significant contribution toward effective self-regulation in the public interest. Advertisers should be prepared to substantiate any objective claims or offers made before publication or broadcast.
Upon request, they should present such substantiation promptly to the advertising medium or BBB. BBB recognizes that truthful price information helps consumers make informed purchasing decisions and that comparative price advertising 1 plays an important role in promoting vigorous competition among retailers.
At the same time, misleading or unsubstantiated pricing claims injure both consumers and competitors. The following examples offer guidance on ensuring that pricing claims are truthful and not misleading. If, on the other hand, the former price being advertised is not bona fide, the bargain being advertised is a false one.
Advertisers should be reasonably certain that the comparative price does not appreciably exceed the price at which substantial sales of identical products or services have been made in the trade area for which the claim is made for a reasonably substantial period of time, in the recent, regular course of business. Such comparisons must be substantiated by the advertiser prior to making any advertised comparisons. Descriptive terminology often used by advertisers includes: To the extent that a list price does not in fact correspond to the price at which substantial sales of the product in question have been made, the advertisement of a reduction may mislead the consumer.
Such a comparison must be substantiated by the advertiser prior to making any advertised comparison. This disclosure may be unnecessary in situations where consumers generally know that the list price may not necessarily be the price at which the product or service is sold.
The comparative price advertised must be based on:. If the sale exceeds thirty 30 days, advertisers should be prepared to substantiate that the offering is indeed a valid price reduction and has not become their regular price. However, if that extension is for more than a short period of time, the advertiser must be prepared to substantiate that the offering is still a valid price reduction and has not become its regular price.
In such an instance, the advertiser must avoid any undue or misleading display of the maximum. In such circumstances, the advertiser must comply with Section At least thirty 30 days must elapse before another such offer is promoted in the same trade area.
Representative language frequently used in such offers includes:. That selling price must be clearly and conspicuously disclosed in the advertisement. Such an offer may be misleading if it would disguise the true retail price or create the false impression that a reduced price or a special price is obtainable only by such trade in.
The federal Truth in Lending Act, as well as applicable state and provincial laws set requirements for clearly and conspicuously disclosing credit terms in the advertisement. They contain important provisions that affect any advertising to aid or promote the extension of consumer credit. Therefore, advertisers are advised to consult Section Examples of closed-end credit include installment loans and many automobile loans.
Advertisers should consult the Cost of Borrowing Regulations set out in the Trust and Loan Companies Act, Bank Act and Cooperative Credit Associations Act for specific requirements concerning disclosure, terminology and layout conditions. These regulations cover forms of closed-end credit, such as fixed credit loans for an automobile, as well as open-end credit, including credit cards and lines of credit. Consumer credit is also extended to consumers whose ability to pay or credit rating is below typical standards of credit worthiness;.
The finance charges and annual percentage rate do not appreciably exceed those charged to consumers who meet generally accepted standards of credit worthiness; and.
The consumer is dealt with fairly on all conditions of the transaction, including the amount of the down payment, the period of repayment and the consequences of a delayed or missed payment.
They must only be used when all credit requests are approved. Whenever an advertiser mentions a price in advertising, the existence of any unavoidable or extra charges must be clearly and conspicuously disclosed in immediate conjunction with the price. This would include, for example, charges for delivery, installation, assembly, excise tax and postage and handling. Instead, they must ensure that the consumer affirmatively consents either online, over the phone, or in person to the negative option feature before enrolling the consumer in the plan.
Its purpose is to switch consumers from buying the advertised product or service, in order to sell something else, usually at a higher price or terms more advantageous to the advertiser.
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