A special offer: how to use the word "free" on your Business Website.

• Author: Lowe, Matt
• Position: Legal Brief

If you think you can offer any service or product for free on your business website, think again. The use of the word "free" is anything but simple. Why? Because of three omnipresent letters: FTC.

The Federal Trade Commission maintains strict regulations as to how the word "free" may or may not, be used in marketing and advertising. To the untrained eye, such regulations seem convoluted and bizarre, but with time, the FTC's concerns become logical. Accordingly, below are relevant points to keep in mind before you broadcast any promises of free offers to your customers.

GENERALLY

An offer for a free product or service must be based upon a regular price for the product or service that must be bought by consumers in order to avail themselves of that which is represented to be free. In other words, when a customer is told that Product B is free only if Product A is purchased, then the word "free" indicates that the customer is paying nothing for Product B and no more than the regular price for Product A.

Thus, a customer has a right to believe that the merchant will not directly recover, in whole or in part, the cost of the free merchandise by marking up the price of the product that must be purchased, by the substitution of inferior merchandise or service, or otherwise. For example, Toms Tuna Inc. cannot offer "Buy One Can of Tuna and Get the Second Free" and then sell the first can of tuna for $4 (when he normally sells it for $2) in order to make up the difference.

DISCLOSURE OF CONDITIONS

When making any free offer, all of the terms, conditions and obligations upon which receipt and retention of the free item are contingent should be set forth clearly, conspicuously and in close conjunction to the offer so as to leave no reasonable probability that the terms of the offer might be misunderstood.

For example, disclosure of the terms of the offer set forth in a footnote of an advertisement to which reference is made by an asterisk placed next to the offer is generally not regarded as making disclosure at the outset. A footnote will not suffice. Rather, it is preferable to place your disclaimer language directly beneath the offer.

GEOGRAPHY

The seller must identify those areas in which the free offer is not available if the advertising is likely to be seen in such areas, and should clearly state that it is available only through participating resellers, indicating the extent of participation by the use of such terms as some, all, a majority of...