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Guidelines for the Retail Sector on Price Promotions

Free offers and similar promotions

The unqualified use of the word "free" in an offer or promotion means that a consumer cannot be expected to incur a charge of any kind other than what is set out below.

The Consumer Protection Act prohibits representations that describes a product as "free" "without charge" or any similar type description, if a consumer has to incur any financial cost "other than the necessary and reasonable cost of (i) responding to the representation, and (ii) collecting the product or having it delivered".

Traders should make it clear to consumers, at the time the offer for sale is made, exactly what they will have to do to get the "free" or "reduced price" offer. For example, if any type of direct payment is required such as postal or delivery charges, or if a number of tokens need to be collected, these conditions should be made clear.

Traders should not claim that an offer is "free" if they try to offset the cost of the free offer by:

  • Imposing additional charges that would not normally apply; or
  • Inflating the price of the product or the cost to the consumer of any incidental charges, for example, charging more than the actual cost of postage or using a premium telephone charge.

Example of unacceptable "free offer"

A newspaper / magazine advertises on the front cover "free DVD". However, when the consumer buys the publication s/he finds out that it would be necessary to collect a number of tokens to claim the DVD. In effect this means that the consumer would have to incur the cost of purchasing a number of publications to claim the "free offer".

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