Laws related to business advertising

Advertising can be a powerful incentive for customers to buy. Companies use advertising to:

  • build an image
  • promote special offers
  • increase sales.

Misleading advertising

Businesses must be honest about products and services they advertise:

  • descriptions must be accurate - including the standard, quality, value, style or model, availability spare parts and repair services
  • buyers must be told if the goods have been used - eg demo models
  • advertised endorsements and sponsorships must be true
  • verbal and written quotes must be accurate as they become part of the contract.

Bait advertising

A business can't advertise a special price on something to lure people into the business if the product isn't available, or is in very limited supply. Sale items with a limited supply can be advertised but only if it's clearly stated that the item is in short supply or is on sale for a limited time.


Prices displayed to the public should be the complete price and include GST. Sometimes businesses will offer a package and show prices for each component. However, the total price must be the most obvious shown.

The 'headline' price must include any additional fees, charges or pre-selected options.

Optional extras don't need to be included - e.g delivery options - as long as they aren't automatically added once a consumer starts the buying process.

Advertising errors

Businesses should notify consumers as soon as a mistake is noticed. The goods must be sold at the lowest price until the price is corrected or removed from sale. Tell consumers about the error by displaying a notice:

  • near the item in the store
  • at the entrance of your business
  • in a newspaper.

Advise Consumer and Business Services on 131 882.

Gifts and prizes

Businesses that offer gifts or prizes as part of a promotion should:

  • supply the gift or prize within a reasonable time
  • disclose all special terms and conditions
  • clearly show the value of the gift or prize.

Related information

Other websites

Advertising and promoting your business - Australian Competition and Consumer Commission

Contact CBS

Online: Contact CBS

Phone: 131 882

GPO Box 1719
Adelaide SA 5001

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Page last updated 6 December 2022

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