NAD Refers Nectar Sleep to FTC After Advertiser Fails to Comply with NAD Decision

New York, NY – December 10, 2019 – The National Advertising Division has referred advertising by Nectar Sleep LLC to the Federal Trade Commission for further review after finding that the advertiser did not make a bona fide effort to comply with an earlier NAD decision.

In its July 2019 decision, NAD recommended that Nectar discontinue advertising claims for the company’s Nectar Mattress that were challenged by Tuft & Needle, LLC, maker of competing mattresses.

NAD is an investigative unit of the advertising industry’s system of self-regulation and is a division of the BBB NP’s self-regulatory and dispute resolution programs.

In the underlying case, NAD examined claims that included:

Express claim

• “LIMITED OFFER: $125 Off + 2 Free Pillows.”

Implied claims

• The Nectar mattress was previously sold at a higher price.
• The Nectar pillows are available for purchase.

In the underlying case, NAD recommended that the advertiser discontinue the claim “LIMITED OFFER: $125 Off + 2 Free Pillows” because, based on the evidence in the record, NAD determined that the claim was misleading to consumers.  Nectar did not provide NAD with any evidence about its previous advertising for its mattresses or pillows.  NAD noted that, despite the advertiser’s representations to the contrary, it does not appear that the Nectar mattresses were ever offered for sale at the “regular” price prominently displayed on its website or in its retail advertising.  Similarly, NAD was presented with no evidence that Nectar’s offer for “2 Free Pillows” had been made available to consumers for a limited amount of time.

In its advertiser’s statement, Nectar stated that it “will comply with NAD’s recommendations” and that it “has already taken substantial steps to discontinue the challenged advertisements and remove them from the various media in which they appear.”

In October 2019, the challenger informed NAD of Nectar’s internet advertisements featuring a limited time “Labor Day” sale – specifically “$100 off & get 2 memory foam pillows” – which began on or about August 12, 2019 and continued beyond the advertised end date of September 9, 2019 (albeit due to a technical glitch). NAD concluded that the claim “$100 off & get 2 memory foam pillows” is substantially similar to the promotion in the underlying case and, therefore, determined that the claim is appropriate for review on compliance.

In response to NAD’s compliance inquiry, the advertiser stated that the $100 off was a bona fide discount from Nectar’s regular pricing.  However, NAD noted that, as in the underlying case, the advertiser did not offer any evidence about its previous advertising for its mattresses or pillows, specifically whether the Nectar mattresses were ever offered for sale at the “regular” price prominently displayed on its website or in its retail advertising. 

NAD also considered whether the “free” offer was available for a limited time.  In addition to the “sale” at issue in the underlying proceeding and the Labor Day sale identified by the challenger in this proceeding, NAD identified two other “sales” offering two “free” pillows in its own search of the advertiser’s website.  NAD determined that four “free offers” in less than one year does not comport with the FTC’s guidance on free claims, which states that “no more than three such offers should be made in the same area in any 12-month period.”

Given the advertiser’s failure to make a good faith effort to comply with NAD’s recommendations, NAD has referred the advertising at issue to the FTC for further review.

About BBB National Programs: BBB National Programs (BBB NP) fosters trust, innovation, and competition in the marketplace through the development and delivery of cost-effective third-party self-regulation, dispute resolution and other programs. These programs were formerly administered by the Council of Better Business Bureaus. BBB NP is the home of industry self-regulatory and dispute resolution programs that include the National Advertising Division (NAD), National Advertising Review Board (NARB), BBB EU Privacy Shield, BBB AUTO LINE, Children’s Advertising Review Unit (CARU), Children’s Food and Beverage Advertising Initiative (CFBAI), Children’s Confection Advertising Initiative (CCAI), Direct Selling Self-Regulatory Council (DSSRC), Electronic Retailing Self-Regulation Program (ERSP), Digital Advertising Accountability Program (Accountability Program), and the Coalition for Better Advertising Dispute Resolution Program (CBA DRM). The programs are designed to resolve business issues and advance shared objectives by responding to marketplace concerns to create a better customer experience. To learn more about industry self-regulation, please visit: BBBNP.org.