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Guidance on the use of the word “FREE” in marketing promotions

 

 

The Advertising Standards Authority is the UK’s independent regulator of advertising across all media, whose work includes acting on complaints and proactively checking TV, Radio, print and online media to take action against misleading, harmful or offensive advertisements, sales promotions and direct marketing.

 

If they judge an ad to be in breach of the UK Advertising Codes, it must be withdrawn or amended and the advertiser must not use the approach again.

 

Today we shed some light on the Committee of Advertising Practice (CAP) rules it follows for Sales Promotions:

 

In recent years, the ASA has published several adjudications on the use of “free” in marketing communications, a claim that marketers and consumers have often found confusing.

 

Some consumers expect “free” promotional goods to be entirely without cost and in some promotions consumers receive something for absolutely nothing, for example, a free product sample handed out to passers-by. But the Code allows a free item to be conditional on the purchase of other items (see below) and promoters may make a minimal charge for obtaining a so-called “free” item. 

 

For example, promoters may charge the uninflated cost of postage (though front-page flashes offering “free” goods should indicate that it is extra, for example “plus postage”). Promoters wishing to offer ‘free’ goods cannot legitimately charge for anything other than postage, such a packaging, packing, administration, handling, insurance etc.

 

The question of whether a product or service should be referred to as “free” or “inclusive” has proved most troublesome in recent years. Broadly, if a product is offered “free” as part of a conditional-purchase promotion that is unlikely to breach the Code but marketers may not describe an individual element of a package offer as “free”: the proper term is “inclusive”.

 

The Code allows “free” to be used if customers are required to buy other items – a conditional purchase promotion – provided their liability for all costs is made clear, the quality or composition of the paid-for items has not been reduced and the price of the paid-for items has not been inflated to recover the cost of supplying the free item. If the item that is being described as “free” is genuinely separate from and additional to the item that the customer is required to pay for, the offer qualifies as a conditional-purchase promotion and the item may legitimately be described as “free”. An offer can satisfy the criteria for being a conditional-purchase promotion in one of two ways: (i) the paid-for item is separable from the free item for example, a free lipstick with the purchase of a women’s magazine or (ii) the paid-for item has an established price and is usually sold alone without the free item, for example a chocolate bar with 50% extra free.

 

A conditional-purchase promotion may be channel-dependent. For example, “free travel insurance for customers who book their holiday online” (provided customers who book the same holiday by telephone are offered the same price but are not offered free insurance).

 

In contrast to a conditional-purchase promotion, the CAP Code prohibits the use of “free” to describe “an individual element of a package … if the cost of that element is included in the package price”. A package is a pre-arranged combination of features offered for a long-term single, inclusive price if customers cannot exercise genuine choice on how many elements of the package they receive for that price. For example, a mobile-phone subscription offers a certain amount of airtime, a certain number of text messages and a voicemail facility for one all-inclusive package price. Each element is intrinsic to the quality and composition of the package being advertised for the package price. Because customers cannot exercise genuine choice over how many elements they receive for the price paid, the elements are all included in the package price and may not be described as “free”.

 

But marketers who add an element to their existing package, without increasing the price of the package or reducing the quality or composition of the elements that are already included in the package, may describe that added element as “free” for a limited period. Once the element has formed part of the package for a certain period, consumers are likely to regard it as a standard “inclusive” feature of the package. As a rule of thumb, therefore, marketers should avoid describing elements that have formed part of a package for more than six months as “free”.

 

For both conditional-purchase promotions and packages, one-off, up-front costs incurred, for example to buy equipment, do not negate claims that products or services supplied without subscription are “free”. For example, digital free-to-air television channels are available only to consumers who have the necessary digital receiving equipment and call packages are available only to consumers who have a telephone and line.

 

Advertisers who want to market existing products to potential new customers may do so. By contrast, if the introductory offer relates to a product that has never been sold before, the marketer cannot demonstrate that the “free” item is additional to what is usually supplied for the price or that it has added the item to an established package without increasing the price. But an offer of a free pair of sunglasses with the first issue of a fashion magazine, where the sunglasses are separable from the magazine, is likely to be acceptable.

 

Marketers should not try to circumvent the rules by using words that mean “free”. Claims such as “gratis”, “complimentary”, “without charge” and similar are likely to be understood by consumers as being analogous to “free”.

 

Promoters should not use the term “free trial” to describe “satisfaction or your money back” offers, “buy one get one free” offers or other offers for which a non-refundable purchase is required. If relevant, promoters should provide a cash refund, postal order or personal cheque promptly to free trial participants.

 

For further advice on the CAP Code and your promotions get in touch with Reina D’costa, Media solicitor, call on +44 (0) 121 562 1704 or email info@mybusinesscounsel.com.

 

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