As we get ready in the USA to celebrate our July 4th Independence Day, we thought it appropriate before we head out of town for the long weekend to ponder being free in the commercial sense or how to substantiate “free” claims. Following a challenge by Office Depot to the advertising claims of Staples and OfficeMax, the National Advertising Division of the Council of Better Business Bureaus has recommended that both companies discontinue their claims of “free” supplies.
The challenged claims included print and Internet advertisements made in connection with the companies’ respective “rewards” programs. The Staples advertisements stated “Buy ANY of these office supplies, get 100% back in Staples Rewards” and “It’s like getting supplies for FREE.” The Staples Rewards program allowed customers who registered for the program to redeem Staples Rewards for future supplies if used within a limited time period.
OfficeMax was challenged for claims made in connection with a similar rewards program. The OfficeMax advertisements stated, "It's like getting one FREE," followed by the disclosure, "Pay $34.99 plus earn $35 in MaxPerks Bonus Rewards". However, OfficeMax’s Bonus Rewards were subject to certain restrictions and limitations: customer couldn't use the reward points for 30 days; the points were subject to cancellation at any time; and the points expired after 90 days. In its challenge to its competitors’ use of the word “free”, Office Depot cited the FTC Guide Concerning use of the Word “Free” and Similar Representations, which states that “when making ‘Free’ or similar offers … all of the terms, conditions and obligations should appear in close conjunction with the offer of ‘Free’ merchandise or service.” Office Depot argued that Staples’ and OfficeMax’s “free” claims violated both the spirit and letter of the FTC Guide because the advertising did not include the conditions and major limitations of its offer clearly and conspicuously.
In response, both Staples and OfficeMax argued that all of the conditions and limitations of their offers were made both clear and conspicuous. Additionally, OfficeMax argued that they had not claimed that the merchandise was “free”, just “like free”.
The National Advertising Division did not find Staple’s and OfficeMax’s arguments convincing, however, and in two June decisions, they emphasized that goods are not free when they come with too many strings attached. The NAD stated “Simply put merchandise is either free or its not”. The NAD added that the word “free” has “cachet with consumers and should be reserved for offers that are truly without cost…”. The NAD recommended that both companies discontinue its’ claims of “free” supplies.
Both Staples and OfficeMax, Inc. have stated that they respectfully disagree with the position taken by NAD and have indicated that they will appeal the decisions.
The Consumer Advertising Law Blog wishes you enjoy a happy holiday weekend, completely 100% with no disclaimers needed free from stress and distraction!