From the Hotline

By Teri Henning, General Counsel
Pennsylvania Newspaper Association

Q: When is it ok to use the term “free” in advertising?

A: It depends. An advertiser cannot advertise something as “free” unless it is actually free (no hidden charges). Even then, there are a number of requirements relating to the use of "free" and certain situations where the term cannot be used at all. For example, you cannot advertise something as "free" in conjunction with the sale of something for which the price is negotiated (such as a car).

The Federal Trade Commission has issued a guide on the use of the word “free” and similar terms in advertising. The FTC Guide can be found at: http://www.ftc.gov/bcp/guides/free.htm. In the Guide, the FTC urges advertisers to use extreme care when using “free” or similar terms in an advertisement, to avoid any possibility that consumers will be misled or deceived.

Among other things, the FTC Guide includes the following rules:

--Any item advertised as "free" must be free (no hidden charges). In other words, if a customer gets the free item only when buying a product, the product that is being sold cannot be marked up in price or of lower quality. It must be offered at the same condition and price that it would be sold at without the "free product."

--All of the terms and conditions of receiving the "free'' item (such as buying another item) must be set forth clearly and conspicuously in any advertisement. Using an asterisk and a footnote to add or describe conditions is not acceptable.

-- If a product or service usually is sold at a price arrived at through bargaining, rather than at a regular price, an advertiser should not suggest that another item is being offered for "free" with the sale. The Pennsylvania Automotive Association and the Pennsylvania Attorney General’s office take the position that if an automotive dealer wants to include something along with the purchase of a car, the ad could read "A ____ is included with the purchase price of the vehicle." Any such ad must include one of the following disclaimers: 1) Cost of this promotion may increase the price of the vehicle; or 2) This is a combined offer. Make your best deal on a package price.

-- A product or service should not be advertised with a "free" offer for more than 6 months in any 12 month period. At least 30 days should elapse between "free" offers, and a "free" offer should not be promoted more than 3 times in a 12 month period.

-- the FTC rules apply to terms that mean the same thing as “free,” including, but not limited to, “no charge”, “bonus”, or other words or terms that convey the impression to the consuming public that an article of merchandise or service is “Free.”

Remember, under the Pennsylvania Unfair Trade Practices and Consumer Protection Law, a publisher will not be liable for a false or misleading ad, as long as the publisher has printed the ad "in good faith" and "without knowledge" of the misleading nature of the ads. When taking advertisements that include "free" offers, the newspaper will generally not have the facts to determine whether the offer/advertisement is truthful or accurate. Knowing the above rules, however, can help a newspaper assist its advertisers. In addition, with respect to some of the rules, the ad copy itself could disclose a violation.

Please call the PNA’s Legal Hotline at (717) 703-3076 or your newspaper’s lawyer if you have any questions.

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