Back to School: Lessons in Truthful Advertising

Like other mothers across the country, my back-to-school ritual last week included a visit to Staples to shop for school supplies. Who would not be lured by “easy” shopping but more importantly “free” highlighters? Indeed, the “free” highlighters were of particular interest to me as a mother, but they were also of equal interest to me as an advertising lawyer.

Staples’ shelf marker proclaimed the highlighters were “FREE” with rebate. I asked the helpful red-shirted store clerk what that meant. He responded that if I fill out the rebate request online, I would receive a full refund of the purchase price. So, with kids eagerly clutching their “free” highlighters, I approached the cash register. Again, I asked what the offer meant, and I received the same answer. After our purchase, I examined the receipt for the rebate, and while my children gathered our bags, I asked the clerk whether the refund would appear on my credit card. She did not know the answer, and we stood patiently while she checked with the store manager. Upon her return, she informed me that the refund was not really a refund but rather a store credit for the original price of the highlighters. I questioned her further and found out the store credit would likely expire within a month to 2 months.

Now, to me, and probably to most consumers and regulators, “free” means just that. It does not mean a store credit that quickly expires; “free” means I receive an item with no conditions, unless those conditions are clearly and conspicuously disclosed to me. I returned the highlighters since they really were not “free” but instead were meant to draw me back into the store to make another purchase in the future. My children were amused and perhaps frustrated by my reasoning, but they learned a valuable lesson about reading advertisements with healthy skepticism.

What was most surprising about Staples’ advertising is that it has been the subject of legal inquiry regarding its use of the word “free.” Earlier this year, the National Advertising Review Board (NARB) recommended that Staples modify or discontinue its advertising claim, “[I]t’s like getting supplies for free.” Staples had made this claim when enticing customers to sign up for its loyalty program. Customers who had purchased certain items would receive a rebate back in the form of Staples Rewards points. The NARB agreed with the earlier adjudicator’s decision and comment that “simply put, merchandise is either free or it is not.” The NARB concluded, “Staples is not offering ‘free’ merchandise as suggested by the challenged advertisements.”

It seems that Staples is still playing fast and loose with the definition of the word “free.” One of fine points of fee in the NARB decision was that Staples had inadequately disclosed expiration dates of its loyalty points. Yet, when I went in to by the highlighters, the shelf tag made no mention of a store credit that would expire. Instead, it just advertised that the highlighters were “FREE”.

We have yet to see whether the FTC will become interested in Staples’ advertising practices or whether a competitor will launch another complaint. That being said, as advertising attorney, I understand that corporations use advertising to draw consumers in-store and to make the cash register ring. I also remind clients that consumers like a bargain, but they also like when brands are truthful and candid with them. The surest way to build customer loyalty is not with a confusing rewards program or disingenuous “free” offers. Consumers (and regulators) instead value honesty and clarity I did not buy the highlighters at Staples; instead, I bought them down the street at Target.