Consumer Offers

"Buy one get one FREE!" 
"Good for $1.00 off your next purchase." 
"To get your own GIZMO widget, send in $3.00 and two proofs-of-purchase from GIZMO cereal."

Do any of these sound familiar? From Sunday newspaper supplements to our favorite stores, we've all seen these offers for almost every product under the sun. Creating a snappy headline is only the beginning.

The first step is to correctly identify the type of offer at issue. With a coupon, the holder makes a qualifying purchase, presenting the coupon at check-out, and receives a certain monetary amount back from the retail store at that time. Rebates operate like coupons except that submission occurs via mail, not at the store. Premium offers involve a consumer submitting by mail money and/or proof(s) of purchasing certain product(s) (e.g., a UPC) and receiving merchandise of some kind in return by mail.

Next, terms and conditions must be developed, so as to limit the scope of the offer as well as to protect against fraud. While the relevant points vary with the type of offer, there are some general themes: the timing of the offer; any geographical limitations; providing clear, concise instructions to the consumer (and, for coupons, the retailer as well). Use of "free" (or similar wording) in offer copy implicates state and federal laws. For premium offers and rebates, compliance with the Federal Trade Commission's Mail or Telephone Order Merchandise Rule must be considered. Premium offers involve other key concerns, such as the quantity of premium items to be made available and the safety of the item.

The product being promoted is also critical. For certain regulated products, the use of offers may be severely restricted or prohibited. For instance, in all states, rebates and premium offers may be used to promote alcohol beverages, subject to certain restrictions; while, in certain states, alcohol beverage coupons are banned outright.

Finally, as with other promotional vehicles, online offers merit especially close scrutiny in light of the dynamics of the medium.