Consumer Law Library

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)

Scanned CFR pages, OCR text may contain errors; the linked Library of Congress PDF is the authority. Not legal advice; not affiliated with the FTC. These rules and guides are historical: most were rescinded or replaced, so do not assume any is in force.

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

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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.

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