Advertising is at the core of attracting new customers, publicizing products and building profits. Advertisements frequently focus on a certain aspect of a product, such as its ease of use, ergonomic design or superiority over the competition.
Whatever you choose to emphasize, the Federal Trade Commission Act generally prohibits that ads contain “unfair or deceptive acts or practices in or affecting commerce.”
That includes advertising that promises lifetime warranties or satisfaction guarantees. Regardless of the cost of a product, you cannot use deceptive language to describe warranties.
To help businesses comply with the regulations, the FTC has issued guidelines for print or broadcast advertising that include:
The Pre-Sale Availability Rule. In general, if an ad mentions a warranty for a product costing more than $15, the ad must tell consumers they can read the warranty at the place of sale before making a purchase. Ads for products available by phone or mail order should tell consumers how to get a copy of the warranty.
This rule doesn’t apply to products that cost $15 or less. The agency says the sole sources of guidance in this are its legal decisions and policy statements. Consult your attorney for help researching this and applying case decisions to your ad content.
The FTC offers these examples of ads that are sufficient to disclose availability:
|“The XYZ washing machine is backed by our limited one-year warranty. For complete details, see our warranty at a dealer near you.”|
|“The XYZ bicycle is warranted for five years. Some restrictions may apply. See a copy of our warranty wherever XYZ products are sold.”|
|“Don’t take our word — take our warranty. See our limited two-year warranty where you shop.”|
Satisfaction Guaranteed. You can use terms such as satisfaction guaranteed, money back guarantee, or free trial offer only if the seller, or the manufacturer, will refund the full purchase price — regardless of the reason. You must also tell consumers about any limitations or conditions, such as restricting the offer to 30 days. Examples of FTC approved language:
|“We guarantee your satisfaction. If not completely satisfied with Acme Spot Remover, return the unused portion within 30 days for a full refund.”|
|“`Money Back Guarantee! Just return the ABC watch in its original package and ABC will fully refund your money.”|
Lifetime Warranties. This is a complicated area for both the seller and consumer, primarily because it’s often difficult to determine whose life measures the period of coverage. Take, for example, a lifetime warranty on an automobile muffler. “Lifetime” can be used in at least three ways:
1. The life of the car the muffler is installed on. In this case, the muffler warranty would be transferable to subsequent owners and remain in effect throughout the car’s useful life.
2. The length of time the muffler purchaser owns the car.
3. The length of the purchaser’s life.
To avoid confusion, ads should tell consumers which “life” is involved. For example:
|“Our lifetime guarantee on the Whisper Muffler protects you for as long as your car runs – even if you sell it, trade it, or give it away!”|
|“Our battery is backed by our lifetime guarantee. Good for as long as you own the car!”|
The laws can be confusing, the case histories lengthy and FTC policies difficult to interpret. Consult your attorney to make sure your warranties and advertising fall within the law.
(For more information about warranties, click here to read our previous article, “Commercial Transactions Carry Unwritten Implications.”)