Ohio Admin. Code 109:4-3-04 - Use of word "free" etc
(A) It shall be a deceptive act or practice
in connection with a consumer transaction for a supplier to use the word "free"
or other words of similar import or meaning, except in conformity with this
rule. It is the express intent of this rule to prohibit the practice of
advertising or offering goods or services as "free" when in fact the cost of
the "free" offer is passed on to the consumer by raising the regular (base)
price of the goods or services that must be purchased in connection with the
"free" offer. In the absence of such a base price a "free" offer is in reality
a single price for the combination of goods or services offered, and the
fiction that any portion of the offer is "free" is inherently deceptive.
(B) For the purposes of this rule,
all references to the word "free" shall include within that term all other
words of similar import and meaning. Representative of the word or words to
which this rule is applicable would be the following: "Free;" "Buy 1, Get 1
Free;" "2 for 1 Sale;" "50% Off with Purchase of 2." Offers of "free" items of
goods or services which may be deceptive for failure to meet the provisions of
this rule may not be corrected by the substitution, for the word "free," of
such similar words and terms as "gift," "given without charge," "bonus," or
other words and terms which tend to convey to the consuming public the
impression that an item of goods or services is "free."
(C) When using the word "free" in a consumer
transaction, all the terms, conditions, and obligations upon which receipt and
retention of the "free" goods or services are contingent shall be set forth
clearly and conspicuously at the outset of the offer. Terms, conditions, and
obligations of the offer must be printed in a type size half as large as the
word "free," and all of the terms, conditions, and obligations should appear in
close proximity with the offer of "free" goods or services. Disclosure of the
terms of the offer set forth in a footnote of an advertisement to which
reference is made by an asterisk or other symbol placed next to the offer is
not regarded as making disclosure at the outset.
(D) In a consumer transaction in which goods
or services are offered as "free" upon the purchase of other goods or services
the supplier must insure:
(1) That the unit
regular price charged for the other goods or services is not increased, or if
there is no unit regular price, the unit price charged for the other goods or
services is continued for a reasonable period of time;
(2) That the regular quality of the other
goods or services is not reduced, or if there is no regular quality, the
quality level of the other goods and services is continued for a reasonable
period of time;
(3) That no other
conditions are attached to the offer except for the basic condition that the
other goods or services must be purchased in order for the consumer to be
entitled to the "free" goods or services.
(E) Only the supplier's regular price for the
goods or services to be purchased may be used as the basis for a "free" offer.
It is, therefore, a deceptive act or practice for a supplier to offer "free"
goods or services based on a price which exceeds the supplier's regular price
for other goods or services required to be purchased. Likewise, it is a
deceptive act or practice for a supplier to make a "free" offer when the price
of other goods or services required to be purchased is based on a price being
charged by others in the supplier's trade area for the same or similar goods or
services when, in fact, such price is in excess of the supplier's regular
price.
(F)
(1) "Regular price" means the price at which
the goods or services are openly and actively sold by a supplier to the public
on a continuing basis for a substantial period of time. A price is not a
regular price if:
(a) It is not the
supplier's actual selling price;
(b) It is a price which has not been used in
the recent past; or
(c) It is a
price which has been used only for a short period of time.
(2) "Regular quality" means the
quality level at which the goods and services are openly and actively sold by
the supplier to the public on a continuing basis for a substantial period of
time. A quality level is not a regular quality if:
(a) It is not the supplier's actual quality
level;
(b) It is a quality level
that has not been used in the recent past; or
(c) It is a quality level which has been used
only for a short period of time.
(G) It is recognized that some goods and
services are almost never sold at a single regular price, but are instead sold
by means of individual negotiated transactions. A supplier of goods or services
sold in negotiated transactions is not precluded by this rule from making a
"free" offer provided the supplier is able to establish a mean average price
immediately prior to the "free" offer, the goods or services are fungible, and
the mean average price during the "free" offer does not exceed the mean average
price immediately prior thereto.
(H) Continuous or repeated "free" offers are
deceptive acts or practices since the supplier's regular price for goods to be
purchased by consumers in order to avail themselves of the "free" goods will,
by lapse of time, become the regular price for the "free" goods or services
together with the other goods or services required to be purchased. Under such
circumstances, therefore, an offer of "free" goods or services is merely
illusory and deceptive.
(I) This
rule does not preclude the use of nondeceptive, "combination" offers in which
two or more items of goods and/or services such as toothpaste and a toothbrush,
or soap and deodorant, or clothing and alterations are offered for sale as a
single unit at a single stated price, and in which no representation is made
that the price is being paid for one item and the other is "free." Similarly,
suppliers are not precluded from setting a price for an item of goods or
services which also includes furnishing the consumer with a second, distinct
item of goods or services at one inclusive price if no representation is made
that the latter is free.
Notes
Promulgated Under: 119.03
Statutory Authority: 1345.05
Rule Amplifies: 1345.02
Prior Effective Dates: 06/05/1973, 03/14/2005
Promulgated Under: 119.03
Statutory Authority: 1345.05
Rule Amplifies: 1345.02
Prior Effective Dates: (former COcp-3- 01.04 ), Eff 6-5-73, 3-14-2005
State regulations are updated quarterly; we currently have two versions available. Below is a comparison between our most recent version and the prior quarterly release. More comparison features will be added as we have more versions to compare.
No prior version found.