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Advertising Pitfalls

Advertising is a crucial part of any business, but do you know what practices are acceptable and what could constitute a breach of the Australian Consumer Law? We discuss a few of the common advertising pitfalls below.

Special prices

It is common for businesses to tempt customers into buying their products or using their services by offering a “special price”. However, if you advertise a product or service as being on special when the goods or services are normally offered at that price, this could constitute misleading or deceptive conduct.

If you advertise a product or service as being on sale, discounted or any other form of reduction, it must actually be on sale, discounted or reduced.

Bait advertising

If you advertise a special offer to entice customers into your store when you have reasonable grounds to believe that the product will not be available or that the product is unlikely to be available for a reasonable period of time at that price, this could constitute bait advertising which is illegal.

If you are going to advertise a special offer, you must ensure that you have reasonable stock available for the expected demand.

“Free” offers

Another common advertising tool is for businesses to offer an extra service for free with their product, for example, free installation. If the service that is being offered for free is normally included in the price, this could constitute misleading or deceptive conduct.

To avoid any issues, it is important to make sure that the free service is not normally included in the total price.

Recommendation

It is crucial to make sure that you are able to substantiate any advertising claims that you make and that your customers are actually getting, or able to get, the specials advertised.