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Legal tips for e-commerce businesses: When does a ’limited time offer’ become misleading? (Part 3)

26 April 2023

3 min read

#Competition & Consumer Law

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Legal tips for e-commerce businesses: When does a ’limited time offer’ become misleading? (Part 3)

Don’t you hate it when you rush to buy a ‘limited offer’ only for it to be repeatedly extended past the original date? Whilst this might seem a fairly common practice, this type of behaviour from retailers can still be misleading and deceptive and in breach of the Australian Consumer Law.

Crying ‘wolf’: When limited offers can land you in hot water

If you are a retailer wondering whether you can extend the period of a limited offer, it is likely to be low risk if you genuinely did not foresee extending the period at the beginning of the offer period and it’s more of a ‘once-off’ occurrence.

However, when you do this more regularly in response to a spike in sales for example, or arbitrarily set an end date knowing that you will extend it, it could verge on misleading conduct. This is because you may be falsely advertising an end date that is not genuine (in order to get increased interest from consumers, for example). Apart from legal issues, this could also cause mistrust in a brand and a potential for consumers not to respond to your future limited time offers.

Some retailers might think they can get around this by having no end date attached to the offer. However, this can be problematic as it may not clearly communicate the key terms of your offer. This is generally low risk during key sales periods, such as Boxing Day sales, where consumers might expect that your products stay on sale for up to a month for example. 

In both cases, it can become an issue if your ‘end date’ is so far away that it becomes your new ‘normal’ price. This can cause Australian Consumer Law issues, which we covered in our previous article on ‘was/is/now pricing’.

At the other end of the spectrum, some limited offers mysteriously disappear before they can be acted on. This is known as a ‘bait and switch’ sales tactic and also puts retailers at risk of receiving a notice from the regulator. You must state clearly if the good is in short supply or on sale for a limited time (being a matter of, for example, hours or days rather than a more obvious period such as Black Friday or for a few weeks after Boxing Day or June 30).

If there is not a reasonable chance the offer will be available at the advertised price (for example, only one of the advertised TV monitors is in stock and you usually sell five on any normal day), a retailer may be in breach of the Australian Consumer Law unless it promptly offers a ‘rain check’, an acceptable substitute product or takes other corrective action. ‘Switching’ the consumer to a more expensive product once they have clicked through to your website or gone in store seeking the bargain product that was not available in reasonable quantities is not an acceptable tactic unless your advertising is very clear around these limitations.

To avoid breaching consumer laws, take care not to create false urgency around your marketing offers. This means being honest about the terms of your limited offers so consumers can make informed decisions.

For other legal tips for your e-commerce business, read our previous instalments on the use of ‘lifetime warranty’ on your products and risks of misleading sale pricing claims. If you have any questions about your advertising claims, please get in touch with a member of our team below.

The information in this article is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this article is accurate at the date it is received or that it will continue to be accurate in the future.

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