Copenhagen, January 2007
The following is an abridged version of the DCO guidance paper on sales pomotions and special offers.
Section 9 of the new Marketing Practises Act on the information duty pertaining to sales promotion campaigns as well as the specific information duty pertaining to special offers, cf. section 9(2), took effect 1 January 2007. Concurrently with the effectuation of these rules, the bans on sales promotion and quantity restriction set out in the previous Marketing Practises Act in sections 6 and 7 respectively are repealed. The purpose of the information duty set out in the new provision is to ensure transparency.
The new section 9 reads as follows:
9. A sales promotion campaign shall be presented in such a way that the terms of offer are clear and easily accessible to the consumer, and the value of any additional services is clearly indicated.
(2) If a trader offers products or services at a particular price and has reasonable grounds for supposing that he will not be in a position to satisfy demand in a quantity that is reasonable in relation to the offer and the scope of its marketing, the trader shall include a clear proviso to this effect in such marketing.
Following a hearing round in which relevant organisations were involved, the present guidance paper outlines the Consumer Ombudsman’s views on the requirements set out in section 9 which, as a basis, apply to marketing activities and all types of sales promotions. The guidance paper also deals with the interplay between section 9 and the rest of the Marketing Practises Act.
According to the Consumer Ombudsman, a sales promotion activity involves extraordinary incentives, typically in use for a limited period of time and/or under certain circumstances, and whose purpose it usually is to boost sales of goods and services by conveying the impression to the consumer that he or she will benefit financially from the arrangement.
The terms to be met in order to obtain the offer must be correct, clearly formulated and relevant. Misunderstandings or misinterpretations should not arise from reading the terms; and for reasons of clarity, the terms should not contain any unnecessary information. Where restrictions and exceptions may apply, they should appear as prominently as the offer itself.
The terms must be easily accessible, i.e. the consumer should be able to immediately and easily understand the applicable terms before purchasing the goods or service to which the sales promotion is linked. The duty to ensure availability means as a basis ‘at the same time and in the same medium in which the marketing activity takes place’. More specific requirements as to availability may apply depending on the nature of the product, the sales promotion and the medium used for advertising.
Where the sales promotion is an additional service, the market value of the additional service in question must be stated. Where this is not possible, a detailed description of the additional service must be provided. Where a sales promotion is not an additional service, in effect including all types of discounts and ordinary concessions, information about was/now price and the like must be stated due to the general requirements that apply to offer descriptions.
In the event that a special offer is advertised, and the business or trader has reasons to believe that he or she may not be ably to meet the demand sufficiently, provisos as to limited supply must clearly stated to this effect in the advertising. In the event that the supply is very limited, the advertisement should state the number of products available for sale. The proviso/ information about the limited supply should appear in immediate connection to the special offer. An overall proviso stated on the front or back page is not deemed sufficient in that it does not meet the information duty pertaining to special offers. Stating that a stock of products has to be put in before it becomes available for purchase will, as a basis, not exempt the trader or business from the duty to ensure that the product is indeed available for sale or include a clear proviso in his or her advertisement, cf. section 9(2).
When using sales promotions, the trader or business must not only observe the information duty set out in section 9 – he or she must also observe the remainder of the Act which applies alongside or in combination with section 9. This goes in particular for the bans laid down in sections 10 and 11 on coupons, trading stamps and prize competitions (as of 1 July 2011, sections 10 and 11 were repealed). Further, businesses must also pay attention to specific or supplementary regulation of sales promotion campaigns targeted to children and young people, or sales promotions which involve alcoholic beverages.
As of 1 January 2007, the previous ban on quantity restrictions was repealed. Businesses may once again restrict the number of units available to the individual consumer for purchase.