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.
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.
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 is 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 do not need to be included - e.g delivery options - as long as they are not automatically added once a consumer commences the buying process.
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.
Advertising and promoting your business - Australian Competition and Consumer Commission