Advertising: Are You Legal?

by Tom Egelhoff

If the time has finally come for you to begin advertising your business in print or other media, there are several pitfalls awaiting you if you don't adhere to certain legal procedures.
Each year our courts seemed to be packed with frivolous law suits. Even if it never gets to court the expenses of being prepared can break your bank account.

If you can use an advertising agency, part of their responsibility to you, is to make sure you don't put anything about your business out in public that is illegal or misleading.

If you can 't afford an advertising or marketing agency, or just want to do it yourself, here are some points to keep in mind that will keep you off the front pages of your local paper and out of the police reports.

  • What is a Sale? From the customer point of view, a sale is a temporary event. It has a start date and and end date. Sales rarely last over 30 days. Most are week-ends or even one-day sales are common.

    The start and end dates must be clearly listed in the ad. If you are having a Going Out Of Business Sale (Heaven forbid) some states require you to register with a local consumer protection agency, and you may be required to get a permit to have your sale.

    Note: Not a legal issue but a possible money saver -- Don't just make the last day of the month the end of the sale. For example: July ends on a Friday. If you end your sale on July 31st, that means no sale traffic in your business on Saturday, August 1st or Sunday, August 2nd.

    Even if you extend the sale to customers physically in your business on those days your advertising says the sale ended on Friday. If your competitors are running a corresponding sale, the smart ones, will end theirs on August 2nd and steal two days worth of business from you.

  • Save, Save, Save
    We've all seen the ads, "Save up to 50% during our store wide widget sale!" You cannot offer or claim to offer a "percent off" of a product unless a "significant" amount of the product was sold in your store at the full retail price. Or a reasonable comparison product exists at a competitors business and are reasonably near the retail price. You must also show the full retail price you sold the product for originally compared to the sale price.

  • We have the lowest price - Guaranteed!
    No business can legitimately claim to have the lowest prices on all items in the store all the time. You must prominently display the terms of your "low-price guarantee" and how you intend to match or better competitive prices.

    When I was a salesperson at Circuit City (the electronics retail giant) we gave each customer a copy of their "low-price guarantee" when we greeted them. If gave complete details on how the guarantee worked. My guarantee for the books and articles on this site is very simple if you're not satisfied after 30 days, you get your money back, no questions asked.

  • T's and C's: Terms and Conditions or Disclaimers
    Before you offer a warranty or guarantee on a product or service you carry, you must spell out completely the terms and conditions under which you will honor that guarantee or warranty.

    Any conditions for free merchandise, free services or credit must also spell out the conditions to the customer. Car dealers may offer a free gift for a test drive. In many cases the driver must be 25 or older and must prove they can afford the car before the free gift will be delivered.

  • We are so much better than the competition
    If you say you're better, you better be able to back it up in writing and variable proof. We have a Harley Davidson dealer in Belgrade, Montana, just 8 miles from Bozeman. Belgrade is around 8,000 people.

    As you drive into Belgrade there is a billboard that says, "Yellowstone Harley-Davidson, The largest Harley-Davidson Dealer in Belgrade." It's True. They are also the only dealer in Belgrade. Saying you're big, wonderful or great is so generic it's seldom challenged. It's the specific comparisons you need to watch.

If you feel your competitors are violating any of the above, and most of you probably will, contact your local Better Business Bureau. See if any complaints have been made against them and what action has been taken. Add your complaint to the list and ask them to investigate the complaint.

It's usually in their best interest to stop what they are doing rather than face an investigation and adverse publicity. If you are in doubt about your advertising, consult an attorney. It's money well spent. Have him look at your yearly campaign if you have one. Remember, honest is always the best policy.


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