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FTC Warns Against Mouse Print in Online Ads

Last week, the Federal Trade Commission (FTC) revised its guidelines for disclosures in online advertising, including new guidance for ads that appear on cellphone screens.

One of the most important points made by the new “rules” is that when practical “advertisers should incorporate relevant limitations and qualifying
information into the underlying claim, rather than having a separate disclosure qualifying the claim.” That means don’t advertise “all books* on sale” with a disclaimer that says “*hardcover only”, when you could have clearly advertised “All Hardcover Books on Sale” to start with.

Some of the other basic principles include:

  • Required disclosures should be clear and conspicuous;
  • They should be close to the claim to which it relates;
  • Only in rare circumstances should a hyperlink lead to the disclosure;
  • You shouldn’t have to scroll to find the disclosure;
  • Even small banner ads and tweets need appropriate disclosures.

Here are some sample ads created by the FTC to demonstrate some of their new principles:

*MOUSE PRINT:

cell ad

In this ad, 3/4 Ct. is a link that goes to a disclosure that reveal that the diamonds actually may weigh between .72 and .78 carats. The FTC wants to see that disclosure right on this screen, near the 3/4 carat claim.

*MOUSE PRINT:

cold box

There is a health disclaimer at the bottom of this ad which warns that when temperatures are over 80 degrees, this cooler is not capable of keeping foods cold enough to prevent the growth of bacteria which could cause a foodborne illness. The FTC says that something this important should be right in the ad, and in close proximity to the claim that the box keeps food “fresh and cold.”

*MOUSE PRINT:

banner ad

The FTC has separate testimonial rules that require people who are paid to express their opinion to disclose that fact. In this case, “JuliStarz” was a paid endorser. In addition, also in that set of guidelines is the requirement that the average benefit to be derived from a weight loss program be disclosed if the example given is atypical. In this case, the average person will much less than 30 pounds in six weeks, so the disclosure has to say, for example, avg weight loss = 3-lbs/wk.

Don’t hold your breath waiting to see online ads follow all these rules.

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Best Buy Makes Price Matching Policy Permanent, But…

About a week ago, Best Buy announced that as of March 3, it will make permanent the price matching policy that it introduced last fall for the holiday shopping season.

*MOUSE PRINT:

Online or In Store: Find a Lower Price and We’ll Match It

If you find a lower price on a qualifying product at a local retail competitor’s store or a designated major online retailer, we will match the price.

At the time of purchase, we will match the current pre-tax price for new, identical, immediately available products from a local retail competitor’s store and these designated major online retailers: Amazon.com, Apple.com, Bhphotovideo.com, Buy.com, Crutchfield.com, Dell.com, Frys.com, hhgregg.com, HP.com, HomeDepot.com, Lowes.com, Newegg.com, OfficeDepot.com, OfficeMax.com, Sears.com, Staples.com, Target.com, TigerDirect.com and Walmart.com. We will match prices between our stores and BestBuy.com ®. We will also match prices post purchase if we lower our price within 15 days of your purchase.

The Guarantee is limited to one price match per identical item, per guest and does not apply to: Contract mobile phone devices and plans, the online prices of retailers not listed, the online prices of third party vendors (Marketplace vendors) on designated major online retailers websites, post purchase price match requests to competitor’s prices,

Best Buy for Business™, offers that include financing, gift card offers, bundling of items, free items, pricing errors, mail-in offers, coupon offers, competitors’ service prices, items that are advertised as limited-quantity, out of stock, open-box, clearance, refurbished/used items, our and our competitor’s Deal of the Day, daily deals, special hour sale event items and credit card offers, BestBuy.com Clearance & More and Marketplace items, and items for sale Thanksgiving Day through the Monday after Thanksgiving.

The new policy unfortunately continues to exclude some of the best sales (limited quantity, “deal of the day,” etc.) and best sale days (Black Friday through CyberMonday), and limits online price matches to 19 specific stores only. That is better than most stores which don’t match any Internet prices. And, now Best Buy will also match prices for accessories which were excluded previously.

Another change that does not benefit the customer is making the low price guarantee primarily a “before purchase” price match plan. In other words, while they would previously match prices either before or after the sale, now they will only match competitors’ prices at the time of your purchase. After the sale, they will only give you back the difference if Best Buy itself lowers the price, but only within 15 days of purchase.

Why for only 15 days? Because that is the little surprise that wasn’t disclosed in Best Buy’s press release.

*MOUSE PRINT:

Effective March 3, Best Buy’s return policy is being reduced from 30 days to just 15 days for most customers.

Mouse Print* asked Best Buy’s PR department why they were reducing the return period to just 15 days when most competitors’ policies are longer than that, and whether they thought that offering a price guarantee was a fair trade for cutting the number of return days.

“Overall, our updated return and exchange policy is still generous. Best Buy does not charge restocking fees, regardless of the item. Two of our major competitors charge 15 percent restocking fees on all or some consumer electronics products. We expect the impact to our customers to be minimal. The vast majority of our customers already make returns within 15 days of the purchase. In addition, customers have told us that price is more important that return and exchange period.” –Best Buy External Affairs

Just imagine the shocked look on customers’ faces when they try to return a purchase to Best Buy between day 16 and day 30.

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Buy a $999 Water Heater, Get $1050 Back?

The ad seemed too good to be true: Buy a new-fangled GE Geospring Hybrid Water Heater for $999, and get back a $750 cash rebate, plus a $300 federal tax credit:

GE Water Heater

Surely, this neighborhood appliance store is hiding something critical like you have to buy a furnace too.

*MOUSE PRINT:

None!

Well, there is a ton of paperwork and fine print (like what type of heater it must replace, and where you are putting it), but the offer as stated is valid in Massachusetts through participating utility companies. And similar but not always as generous rebates are available in other states too.

Utility companies across the country are trying to promote the installation of energy efficient appliances, and providing rebates for that purpose is a big incentive for consumers. The federal government also has a $300 tax credit for an actual dollar-for-dollar reduction in your federal tax bill when you install certain energy efficient products. (You are only allowed up to $500 in these federal tax credits, so if you have already used them up on say energy efficient windows, you cannot get an additional credit for these water heaters.)

To see what rebate, if any, applies to the purchase of a super energy efficient water heater, use this lookup from GE. It will tell you how much you can qualify for both in state and federal programs.

These programs are not limited to GE brand super efficient water heaters, so do compare features of other brands. Because this type of water heater uses principles of a heat pump, GE says it can save you $325 a year. Are the savings claims true? Consumer Reports tested an older model a few years ago, and did find significant energy savings year after year. You can do your own calculation here based on local electric rates to see what your savings might be. Here is general information about this heater.

Remember, of course, that you will have to pay for installation by a licensed plumber. And, the $999 sale price for the GE hot water heater appears to end on February 20.

The moral of the story: if an offer sounds too good to be true, on rare occasion, it may be the deal of a lifetime.