Advertising is an important part of running most types of businesses, since without advertising it's very difficult to let customers know about your product or service. Word-of-mouth is both the oldest and most effective form of advertising, but it's largely out of the hands of businesses. But every business owner needs to understand the particular laws and regulations meant to ensure relative honesty and transparency in how goods are presented. See FindLaw's Marketing and Advertising Laws section for additional articles and resources.
When you are ready to start advertising your business, here are some things you may want to remember in creating that award-winning advertising campaign:
Substantiation
There must be substantiation of any claims made in connection with your business and its products or services. In other words, each objective factual claim made in regard to a product or service offered by a business must be supported by a "reasonable basis."
Example: An advertisement on the internet for a stapler that praises the efficiency and accuracy of the stapler and its jam-proof qualities must have a reasonable basis in fact.
Representations
If an advertisement claims that the product or service is supported by a particular level of proof, known as an express or implied representation, the facts must actually be so.
Example: An advertisement cannot say "doctors recommend" use of our anti-aging cream, if in fact no doctor has ever recommended that cream. This is an express representation. Similarly, the advertisement cannot picture a group of white-coated distinguished looking gentlemen with stethoscopes around their necks holding jars of the cream, for this creates an implied representation that the cream is doctor-approved and recommended, unless it actually is.
Special Concerns: Health, Nutrition and Safety Products
Advertisements involving products or services for which health, nutrition, or safety claims are made, require higher levels of substantiation than other products, such as our example stapler. Similarly, items such as cosmetics which merely seek to enhance physical qualities, like mascara or blush, generally do not need to be substantiated because that would be considered "puffing." However, "cosmetic" items such as our anti-aging cream which claims to alter, or remove, wrinkles, must be substantiated.
Note: In the interests of consumer safety, most advertisements for food, drugs, cosmetics, diet foods, diet plans, vitamins, and medical devices must be supported by "competent and reliable scientific evidence." This evidence should generally consist of at least two independently conducted double-blind scientific studies.
Endorsements
The use of endorsements in business advertising must reflect the honest opinions or beliefs of the endorsing party. The endorsements may not be deceptive or unsubstantiated. Finally, there must be a good-faith reason to believe that the views expressed continue to represent the views of the endorser and that the endorser continues to be a bona fide user of the product for as long as the advertisement is run.
Examples: A manufacturer of baseball bats cannot create an advertisement for its bats that features a picture of Babe Ruth holding a bat with the caption "The Babe Loved Our Bats," when in fact Babe Ruth never used their bats and never expressed an opinion of them.
A commercial for shampoo featuring a famous Hollywood actress stating that the shampoo is the best she has ever encountered cannot be used for time-eternal if her repeated use of the shampoo caused her hair to fall out, prompting her to tell the country on national television that the product stinks and she would never use it again.
Money-Back Guarantees
The specifics of "money-back guarantees" must be set forth for the consumer.
Example: An advertisement offering a money-back guarantee for dissatisfied purchasers should indicate whether that guarantee includes a refund of the shipping and handling costs incurred in sending the product back and forth.
Statements Concerning Price
Statements regarding the price of a product or service must be truthful. If a claim such as "sold by our competitors for $49.99, and we charge only $37.99" is made, both prices must be legitimate and capable of substantiation.
Free Offers
Offers for free goods or additional services or products "at no extra charge" must meet special requirements and are subject to certain limitations as to how often, and when, they can be advertised or offered.
Warranties
If a warranty or guarantee is mentioned in an advertisement it must generally be clear and conspicuous. The advertisement must clearly state that prior to the sale the purchaser can obtain complete details of the written warranty or guarantee.
Note: Warranties can also be implied in the sale of goods. If a seller wishes to disclaim implied warranties, they must do so in clear and conspicuous language in writing.
Need Help? Call a Business Attorney Today
Before you buy ad space or post on online advertisement, make sure you're in compliance will all applicable laws and regulations. Consider contacting a business and commercial law attorney in your area today.
