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We all know advertising is an essential part of promoting a product or service and reaching your customers. If you outsource marketing to an advertising agency, it is their job to ensure that your advertising is compliant - but if you’re a small business owner who develops your own advertising strategy, trying to wade through the through consumer law can be overwhelming. So what steps do you take to make sure your messaging complies with the Australian Competition and Consumer Commission (ACCC)?

Falling foul of advertising rules can herald a devastating blow to a small business – so here are some rules to make sure you stay on the right side of the law…

Misleading and Deceptive Conduct

It’s important to take care that your advertising does not mislead people about the product or service you are promoting, so once your advertising campaign has been devised, step into the consumer's shoes and consider how they would read your message. 

One common advertising technique which can be used is “puffery.”  A “puff” is best described as an obvious exaggeration that no one could reasonably be misled by.  For example, if a bakery were to advertise its cakes as the “most delicious in the southern hemisphere”, a consumer is almost certain not to take this claim as a serious assertion. That said; use puffery with caution so as not to mislead.

Comparative Advertising

 When comparing your product against that of a competitor, it is important to ensure that the comparison is accurate and that the two products are similar. For example, if you were a manufacturer of a lipstick that lasted for eight hours, you could only advertise as being superior if your lipstick could in fact be worn for longer.  If the competitor’s product was also capable of lasting eight hours, your advertisement could be found to be misleading and deceptive.

Price Comparison Advertising

If you are advertising an item of clothing as 50% off the recommended retail price or changing the label to read “Was $70, now $35”, you must ensure that the prices being compared are accurate and the savings being offered to your customers are genuine. 

Keep the following in mind:

• The higher price must have been the actual price your customers would have had to pay to purchase the product prior to the sale.  The original higher price can not simply be conjured up prior to advertising the product at a lower price.

• The discounted price should be temporary.

• The price comparison must be accurate.

Endorsements

If your advertising campaign features celebrities or sporting identities, take care.  If the personality you are using claims some knowledge of your product (or service) - and if the product is likely to be used in a capacity for which that person is well known - any claims they make about your product must be true.

Prizes

If you are offering prizes, rebates or gifts as an incentive to your customers, you must ensure that you provide the prize that that was originally offered and do so within a reasonable time after making the offer.     

Special offers

If your business is offering goods or services at discounted prices, make sure that you can supply sufficient quantities of your product and that you are ready to respond if the promotion is more successful than initially contemplated.  The discounted offer must also be available for what the ACCC would consider to be a "reasonable" amount of time.

Want to know more? Get to www.accc.gov.au, or get in touch with your legal adviser.

Geraldine Cini is a lawyer in the Commercial Disputes team of Lander & Rogers Lawyers and is a Business Chicks member. You can connect with her here