Key aspects to include in offers and promotional adverts
The difficult economic situation generated by the restrictions and closures of commercial establishments due to the COVID-19 pandemic has generated an increase in offers and promotions that are being advertised by companies as a commercial strategy to encourage consumers to buy their products and to build a bigger client base. Offers and promotions are a useful strategy, however, they are carefully monitored by the Superintendence of Industry and Commerce to guarantee that no consumer rights are being infringed or disregarded. For this reason, merchants and companies need to keep in mind certain requirements.
The Consumer Rights Law (Law 480 of 2011) on its article 5, num 10 states that an offer consists of the provisional offering, done by a merchant or company, of products that have more favorable conditions than the “standard” version of the product for free or at the same price point as the usual product. On the other hand, promotions are considered as the offering done by a merchant or company, of products that have extra content for free, for a reduced price, or products on the “standard” version that is offered for a discounted price. Also, the incentives for consumers such as raffles or contests fall under this category.
All commercial strategies or events that are carried out by a brand or a company that fall into the categories of offers or promotions need to follow certain parameters to avoid any infraction of consumer rights. According to the Superintendence, promotions and offers need to contain at least the following information:
- Full identification of the product, service or benefit that is being offered.
- Conditions of time, place, and manner to access the benefit.
- Terms and conditions for its delivery.
- Time frame of the promotion or offer.
It’s important that each of these points is strategically included on the publicity campaign to avoid any sanctions imposed by the SIC for inducing consumers to error. The inclusion of these elements is also important to avoid any inconvenience with consumers that could result in a reputational (goodwill) damage to the company
If the beginning date of the offer or promotion is omitted in the advert, it will be understood to start from the moment that it became known to the public. This means that the offer will be binding from that moment, even if the promoter is not ready for the beginning of the promotion or offer.
When the duration of the promotion is not stated in the advert, it will be in force until its revocation is made known to the public. In this case, it is necessary that the company announces the revocation using the same type of media and intensity that was used for the original campaign. This omission can generate an additional expense in publicity to announce the revocation. Additionally, it could lead to fines if the SIC considers that the type of media and the intensity were not the same between the two adverts.
Lastly regarding raffles and contests, it is important to note that if they are determined by chance, they fall under the category of promotional games, which is a category of games of chance. These promotional games have special regulations and are supervised by Coljuegos.
BéndiksenLaw can counsel you with the legal planning of your publicity campaigns to avoid sanctions.
Contact us for more information.