Sellers advertise online, in newspapers, on the radio, on TV, in magazines, on billboards, and through other means of communication. The CSPA sets forth specific rules about how sellers can advertise and what constitutes deceptive advertising. In general, deceptive advertising occurs when sellers make misleading price comparisons or misrepresentations about the quality or quantity of their goods. The following outlines specific provisions related to advertising.
Exclusions and Limitations
It is illegal to advertise a sale without listing any specific limitations, if they exist (O.A.C. 109:4-3-02). For example, a supplier may not advertise “20 percent off all shoes” if only children’s shoes are reduced. If an ad includes a picture of items that are not included in the advertised price, this exclusion must be stated. All disclosures must be clear and conspicuous.
Advertisements also must list:
Important terms and conditions;
Extra costs, such as delivery charges, restocking fees and handling fees; and
Limited times of the sale, such as “July 2, 9 a.m. to 1 p.m.”
Bait-and-switch tactics are illegal (O.A.C. 109:4-3-03). Bait advertising occurs when a supplier offers goods or services for sale, but the offer is not a bona fide or “good faith” offer to sell the product or service. An offer is considered not in good faith if the supplier:
Misrepresents an important aspect or function of the product or service;
Secures the first contact with the consumer through deception; or
Discourages the sale of the advertised product or service in favor of a costlier item.
If a seller advertises goods or services at a certain price and sells out of those goods or services, consumers who respond to the ad after the product is no longer available are entitled to a rain check, allowing them to purchase the advertised product or service at a later date for the sale price (O.A.C. 109:4-3-03).
This requirement does not apply if, in advertisements, the seller clearly and conspicuously discloses the number of goods available, such as “at least ten in stock,” or if the seller clearly and conspicuously discloses that the merchandise is seasonal or clearance and no rain checks will be given.
The rain check requirement also does not apply if the seller, at the consumer’s option, allows the consumer to purchase a similar item of equal or greater value at the same savings, or if the seller proves that it had a sufficient supply of the advertised goods, based on reasonably expected consumer demand.
A rain check must be honored within 60 days after it is issued. Once the seller notifies the consumer that the item is in stock, the consumer has 14 days to redeem the rain check. If the March 2011 5 item is not restocked within 60 days, or at any time instead of a rain check, the supplier may sell similar merchandise at the same savings as the advertised goods.
Use of the Word “Free”
A seller may not advertise goods or services as “free” when the cost of the “free” offer is passed on to the consumer by raising the regular price of the goods or services (O.A.C. 109:4-3-04). For example, if the regular price of a box of cereal is $3, a store may not raise the price to $6 per box during a “buy-one, get-one-free” sale in order to offset the cost of the “free” box.
A seller may not advertise that a consumer has won a prize when the consumer must pay certain charges to receive the prize (O.A.C. 109:4-3-06). Plus, all material (important) terms and conditions of a prize offer must be disclosed in advertisements. A seller may not advertise that a consumer has won a beach vacation when, in fact, the consumer must listen to a sales presentation in order to receive the vacation.
Use of the Word “New”
Under Ohio law, used items may not be sold as new (O.A.C. 109:4-3-08). Refurbished or reconditioned products must be properly labeled. For example, a supplier may not advertise or sell a computer as new when, in fact, it has been used and refurbished.
Price comparisons must be based on truth (O.A.C. 109:4-3-12). In advertisements, sellers must not make misleading price comparisons that create false expectations in the minds of consumers. If ads include terms such as “discount,” “bargain,” “outlet,” “wholesale,” or “factory prices,” those terms must accurately describe the products offered for sale. For example, a seller may not advertise that its TVs are “Regularly $5,000, Now $3,000,” unless $5,000 actually is the regular price of that particular kind of TV.
Overview of Advertising Rules:
Exclusions and limitations of an offer must be listed in ads.
Bait-and-switch tactics are illegal.
Sellers must issue rain checks in certain situations.
“Free” must really mean free when used in advertisements.
Sellers cannot offer something as a “prize” if the consumer must pay to receive it.
If an item is used or refurbished, sellers cannot describe the item as new.
Price comparisons must be truthful.