Guide Against Deceptiveuse Of The Word "Free" In Connection With The Sale Of Photographic Film And Film Processing Service
16 CFR Part 242 · Guides · in the Code of Federal Regulations 1971-1971 (1 annual editions)
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Latest edition: Library of Congress, 1971 CFR · Earliest edition: 1971 CFR
Text (1971 edition, OCR)
§ 241.16 (b) The refusal to show, demonstrate or sell the product offered in accordance with the terms of the offer; (c) The disparagement by acts or words of the product offered or the disparagement of the guarantee, or in any other respect in connection with it; (ad) The showing, demonstrating, and in the event of sale, the delivery of a product which is unsuitable for the purpose repre- sented or implied in the offer; (e) The failure, in the event of sale of the product offered, to deliver such product to the buyer within a reasonable time there- after; (f) The failure to have available a quan- tity of the advertised product at the adver- tised price sufficient to meet reasonably anticipated demands. It is not necessary that each act or prac- tice set forth above be present in order to establish that a particular offer does not comply with this section. Nore: The Commission’s Guides Against Bait Advertising furnish additional guid- ance respecting bait advertising. See 16 CFR Part 288 for the Guides Against Bait Advertising. (Guide 15] § 241.16 Guarantees, warranties, etc. (a) An industry member should not represent in advertising or otherwise that a product is guaranteed without clear and conspicuous disclosure of: (1) The nature and extent of the guarantee; and (2) Any material conditions or limita- tions in the guarantee which are im- posed by the guarantor; and (3) The manner in which the guaran- tor will perform thereunder; and (4) The identity of the guarantor. (The necessary disclosure requires that any guarantee made by the dealer or vendor which is not backed up by the manufacturer must make it clear that the guarantee is offered by the dealer or vendor only.) (b) A seller or manufacturer should not advertise or represent that a product is guaranteed when he cannot or does not promptly and scrupulously fulfill his obligations under the guarantee. (c) A specific example of refusal to perform obligations under the guarantee would arise in connection with the use of the phrase “Satisfaction or your money back” if the guarantor does not promptly niake a full refund of the purchase price upon request, irrespective of the reason for such a request. (d) This section has application not only to “guarantees” but also to “warran- ties,’ to purported “guarantees” and Title 16—Commercial Practices “warranties,” and to any promise or rep- resentation in the nature of a “guaran- tee” or “warranty.” Nore: The Commission’s Guides Against Deceptive Advertising of Guarantees furnish additional guidance respecting guarantee rep- resentations. See 16 CFR Part 239 for Guides Against Deceptive Advertising of Guarantees. [Guide 16] § 241.17 Deceptive pricing. An industry member should not repre- sent directly or indirectly in advertising or otherwise that an industry product may be purchased for a specified price, or at & saving, or at a reduced price, when such is not the fact; or otherwise deceive purchasers or prospective purchasers with respect to the price of any product offered for sale; or furnish any means or instrumentality by which others engaged in the sale of industry products may make any such representation. Nore: The Commission’s Guides Against Deceptive Pricing furnish additional guidance respecting price savings representations. See 16 CFR Part 233 for the Guides Against De- ceptive Pricing. (Guide 17] PART 242—GUIDE AGAINST DECEP- TIVE USE OF THE WORD “‘FREE” IN CONNECTION WITH THE SALE OF PHOTOGRAPHIC FILM AND FILM PROCESSING SERVICE § 242.1 The guide. (a) A common form of bargain adver- tising used to promote the sale of photo- graphic film processing service is the offer of a roll of film, represented as being free to consumers who purchase a par- ticular advertiser’s service. (b) Film processors should avoid rep- resenting film as ‘free’ when their quoted price for processing is not their regular price for such service, or, when the price charged for processing in con- nection with the “free” film representa- tion is in excess of the price regularly charged by them for processing alone. A regular price is the price at which an article or service is openly and actively sold by the advertiser to the public on a regular basis for a reasonably substantial period of time in the recent and regular course of business. A price which (1) is not the advertiser’s actual selling price, (2) is a price which was not used in the recent past but at some remote period in the past, or (3) is a price which has been 390 Chapter |—Federal Trade Commission used only for a short period of time, is not a regular price. Consequently, use of any price or amount, other than the ad- vertiser’s own bona fide regular price, in connection with a “free” film representa- tion is deceptive. (c) “Free” film offers are understood by consumers to mean that the price charged by the advertiser is for process- ing alone and has not been raised to in- clude any payment for the film. In other words, they understand that the film, in fact, is a gift to the consumer given by the advertiser in return for the process- ing business he receives. In such circum- stances, if any portion of the represented price charged for processing includes any payment for the film to the processor, the “free” film offer is deceptive and con- sumers are misled. (d) Where a processor has not estab- lished a regular price for processing serv- ice by itself, he has no basis, except in the case of introductory offers, upon which to make a “free” film representation. Likewise, a processor may not justify “free” film offers, whether advertised with or without qualification, on the ground that his price for processing and film is equal to or less than the price charged by local developers for process- ing alone, in a given trade area. Only the processor’s own regular processing price may be used as a basis for the “free” film representation. (e) Continuous free film offers or the repetition of such offers with great fre- quency should be avoided. Continuous or frequent offers of free film made in connection with the sale of processing service are false and misleading since the processor’s price for his service alone will, by lapse of time, become his regular price for processing service and film in com- bination. The film, in such circum- stances, would therefore no longer be “free”. (f) Introductory (temporary) offers of “free” film should not be advertised where processors do not, in good faith, expect to discontinue the offer after a limited tlme and commence selling proc- essing service separately at the same price at which the offer of such service, together with the “free’’ film, was made. (gz) The guide does not preclude the use of nondeceptive “combination” offers in which film and processing are offered for sale as a single unit at a single stated price, and where no representation is made that the price is to be paid for one item and the other is ‘free’. Slmilarly, § 244.0 film processors are not precluded from setting a price for processing which also includes furnishing the purchaser with a replacement roil of film at one inclu- sive price—again, where no representa- tion is made that the latter is “free”. Nore: On December 1, 19538, the Commis- sion approved a trade practice rule on use of the word “Free”, The provisions of the guide set forth above are advisory in nature and are not to be construed as replacing or modi- fying any of the provisions of the afore- mentioned trade practice rule. (38 Stat. 717, as amended; 15 US.C. 41-58) [83 F.R. 8336, June 5, 1968} PART 244—GUIDES FOR THE GREET- ING CARD INDUSTRY RELATING TO DISCRIMINATORY PRACTICES Sec. 244.0 Definitions. 244.1 Price discriminations in general. 244.2 Promotional assistance. AutHorIry: The provisions of this Part 244 issued under secs. 5, 6, 38 Stat. 719, as amended, 721; 15 U.S.C. 45, 46: 49 Stat. 1526; 15 U.S.C. 13, as amended, unless otherwise noted, Source: The provisions of this Part 244 appear at 33 F.R. 16634, Nov. 15, 1968, unless otherwise noted. § 244.0 Definitions. For purposes of this part the following definitions will apply: (a) “Greeting card” means any com- mercial form of card, sheet, or folder which conveys a greeting or similar type of message by means of printed reading matter or pictorial matter. The term in- cludes “chromos” which contain pic- tures but no words, and also, cards which contain words but no pictures. (b) “Publisher” means any person, firm, partnership, corporation, or any other organization which has greeting cards printed or packaged, whether in its own plant or other plant, for sale ex- clusively by it. It does not include the printer or packager unless he acts for his own account. (c) “Distributor” means any person, firm, partnership, corporation, or any other organization that purchases greet- ing cards for resale to parties other than the ultimate consumer. This includes wholesalers, jobbers, and all other inter- mediaries other than retailers. (d) “Supplier” means any greeting ecard publisher or distributor. (e) “Retailer” means any seller of greeting cards to the ultimate consumer, such as card shops, drug stores, discount houses, department stores, etc. 391