There are various laws relating to advertising which can be summarised by saying “be honest” and if you are promising to do something, you have to do it. The experts believe you should be putting yourself in the shoes of consumers. Don’t promise what you can’t deliver and ensure your advertisement will be clearly understood by the consumer.
Over-promising or not delivering what you promised can cause you problems under the Trade Practices Legislation which could involve prosecution by the Australian Consumer Competition Commission (ACCC). Some of the common breaches of advertising rules include:-
• “two-pricing” advertising – this is where an item was originally claimed to having been listed for sale at the original price (eg $800) and it has now been reduced to half price (eg $400). If called upon to do so by the ACCC, you need to be able to prove that not only was the item listed for the original sale price, but that you actually made sales at that original price.
• “bait” advertising – this is where an advertisement is placed which lists an item for a very attractive price but when the potential customer goes to purchase the item, he is told “sorry, it is no longer available” and then the sales person tries to sell the potential customer another product. If the potential customer complains to ACCC they will investigate and take action against the business if the ACCC believe there was never any stock available to be sold at that very low price. The ACCC consider that the advertising was only used as a “bait” to get the potential customer into the store.
• omission in advertising – another problem that can occur in advertising is if important information is deliberately omitted from the advertisement. This can be an offence as it could be alleged that the business has deliberately misled the consumer.
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Article by Christie Lewis
Christie is Practice Manager at Alan Lewis Accountants . Besides accounting, her passion is for all things small business (and blogging, of course). You can contact Christie directly at christie@lewistaxation.com.au.
Christie has written 799 awesome articles for us at Alan Lewis Accountants – BLOG
Twitter: @christielewis
{ 1 comment… read it below or add one }
Great, I never knew this, thanks.