Misleading Conduct: How Businesses Can Avoid Santa’s Naughty List

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Table of Contents

• Santa Clause and Other Misleading Conduct
• What is a False or Misleading Claim?
• My Secret Santa is Getting a Gift Voucher
• All I want for Christmas is a Cash Back Offer
• Conclusion

In an earlier article, we looked at how businesses can comply with advertising regulations when promoting their Christmas sales. Below, we continue with our tips for businesses seeking to avoid misleading their customers and staying off Santa’s naughty list.

Santa Clause and Other Misleading Conduct

You may think that a man with a white beard and red suit, delivering presents to the world’s children in a sled pulled by reindeer is misleading. It isn’t. It is most likely puffery.

When promoting their products, businesses cannot make statements that are incorrect or likely to create a false impression. This rule applies to your promotional materials as well as your packaging and any information your employees provide. It is irrelevant whether you, overcome by the Christmas spirit, acted with the best intentions. If the overall impression your promotion created is misleading, then you can expect a visit from the Australian Competition and Consumer Commission (ACCC).

What is a False or Misleading Claim?

A false or misleading claim can be about any of the following characteristics:

• the product or service’s quality, style, model or history;
• whether the goods are new;
• the product or service’s sponsorship, performance characteristics, accessories, benefits or use;
• the availability of repair facilities or spare parts;
• the need for the goods or services; or
• any exclusions on the goods and services.

To ensure your promotional material does not create the wrong impression and spoil the festive season for you and your customers, you should follow these few simple rules:

• Don’t include contradictory statements in the fine print. While it is ok and common practice to include the Terms and Conditions in the fine print, they should not contradict the main message.
• If you want to compare your product to your competitors, make sure that you are comparing the same thing.
• If you make a claim about your products or services, ensure that you have evidence to back it up. Businesses commonly throw around the terms ‘green’ or ‘free range’ without being able to substantiate them.
• If you are promoting goods with limited supply or services with limited availability, this needs to be clear. You should use statements such as “limited stock available” or “limited bookings available”.

The one exception to the rule prohibiting false and misleading claims is where the claim is so widely exaggerated or vague that no one could take it seriously. These types of claims are referred to as ‘puffery’ because you are ‘puffing up’ the product.

My Secret Santa is Getting a Gift Voucher

Gift vouchers can generate increased sales and attract new customers, so it is important to get them right. You must state any terms and conditions or restrictions imposed on the voucher’s use. These may include:

• What the Voucher/Certificate is for,
• When it expires,
• If the consumer must use the voucher in conjunction with anything else, and
• Whether the voucher can and cannot be used (i.e. certain times of day/month/year)

Spending time getting these right will reduce complaints this holiday season and provide a better experience for your customers.

All I want for Christmas is a Cash Back Offer

Another commonly used promotional tool, particularly by electrical and white goods manufacturers, are cash back offers. When consumers are looking to make big purchases, a cash back offer may be just the thing to get them across the line and choose your product or service over a competitor. If you are looking at promoting this type of offer, its success will depend on the following:

• Your offer must be genuine, meaning you must follow through with the offer and failing to do so amounts to misleading and deceptive conduct.
• You must clearly state the applicable terms and conditions. Does the purchase need to be of a particular item or within a specified period? What does the customer need to do to claim the cash back? Do they need to keep their receipt?

The simpler your offer is, and the clearer your terms, the less likely you will have issues with your customers or with a regulator.

Conclusion

We have sought to identify a few common pitfalls that businesses can easily avoid this holiday season. Awareness, when designing and promoting your offers, will help your offer succeed and keep you on Santa’s nice list. If you have any questions about complying with advertising regulations, get in touch! One of LegalVision’s experienced consumer lawyers would be delighted to assist you.