The Government announced this week that new consumer protection
regulations will come into force on 26th May, seven weeks later
than previously indicated. These implement the EU's Unfair
Commercial Practices Directive (UCPD), and restrict how the term
'free' can be used.
Among other things, the Regulations prevent companies from
"describing a product as 'gratis', 'free', 'without charge' or
similar if the consumer has to pay anything other than the
unavoidable cost of responding to the commercial practice and
collecting or paying for delivery of the item".
The Institute of Sales Promotion (ISP) has written to members
telling them that they can no longer use the term 'buy one get one
free'.
"It would appear that 'Buy One Get One Free' (BOGOF) will not be
acceptable, but the mechanic will remain perfectly legal and will
have to be described as something like 'Two for the price of one',"
Philip Circus, the ISP’s director of legal services, told members
in a note to them. "This does not stop any existing promotional
mechanics. It simply means that the word 'free' cannot be used in
relation to them."
The ISP also said that gifts with magazines or other free gifts
cannot be described as such. "We believe that this will prevent the
use of the word 'free' in relation to free gifts with purchase,"
said Circus. "The word 'free' will only be possible in relation to
free samples and any free gifts which do not require more than the
unavoidable cost of a postage stamp or telephone call such as an
absolutely free mail-in."
But the Government has assured OUT-LAW.COM that this will not be
the case.
"We do not believe the UCPD will prohibit the use of the word
'free' in these cases," said a spokesman for the Department for
Business, Enterprise and Regulatory Reform (BERR).
"In the case of 'buy one get one free offers (BOGOFs)' and free
gifts with purchases (eg with magazines) the Government take the
view that the unavoidable cost of responding to the commercial
practice is the cost of buying the product (e.g. the one item in
relation to BOGOFs or the magazine with which the free gift
comes)," he said.
Richard Parkinson of Pinsent Masons, the law firm behind
OUT-LAW.COM, said that BOGOF promotions were an unlikely target of
the law, and that it is aimed at misleading promotions.
"The evil that I believe the regulations are attacking is where
you are offered something for 'free', but then you need to call a
premium rate line or take out a subscription to an unrelated
product or make some sort of payment, for example pay an exorbitant
postage and packing fee," he said.
"It does not, to me, seem to prevent a BOGOF promotion in a
retail environment, as you do not have to pay extra for the free
product," said Parkinson. "I can see the literal interpretation
that the ISP are making – i.e. to get the free item you have to buy
a product and therefore pay more than the unavoidable cost of
responding to the commercial practice – but here it is intrinsic to
the promotion that you have to buy the initial product."
The new rules ban 31 kinds of unfair sales practices including
fake closing-down sales, prize draw scams and aggressive
door-to-door selling. They will also order businesses to refrain
from trading unfairly overall for the first time.
The Regulations, which were laid before Parliament on Monday,
will be enforced by Trading Standards officers and the Office of
Fair Trading.
