NARB recommends Staples modify, discontinue “free” claims

New York, New York – Feb. 9, 2012 – A National Advertising Review Board (NARB) panel has recommended that Staples discontinue or modify the advertising claim “[I]it’s like getting supplies for FREE.”

 NARB is the appellate unit of the advertising industry’s self-regulatory forum.

 The claim was initially challenged before the National Advertising Division of the Council of Better Business Bureaus by Office Depot, Inc., a competing retailer of office supply products.

 In the underlying case, NAD examined claims made in print and Internet advertising, including:

 “Buy ANY of these office supplies, get 100% back in Staples Rewards.”

• “It’s like getting supplies for FREE.”

 The Staples Rewards Program provides that customers who register for the advertiser’s loyalty program will receive a portion of the cost of their initial purchase in Staples Rewards. The Rewards are good for future purchases, subject to certain exclusions, if used within a specified period of time. In the promotions at issue in this challenge, customers would receive Staples Rewards in the amount of the full price of the advertised items.

Following its review of the advertising at issue, NAD concluded that Staples’ claim “get 100% back in Staples Rewards” was truthful and substantiated, but that such an offer cannot be understood as receiving goods for “free.”

 “Simply put,” NAD noted, “merchandise is either free or it’s not.”

 NARB noted in its decision that it “agrees with NAD that one of the messages reasonably conveyed by the challenged advertisements is that consumers who purchase the advertised items will receive another item for free.”

 In reaching its determination, the panel reviewed both the text and graphics in the advertising at issue and noted the emphasis on the word “free,” a predominant feature of the challenged advertisements.

In each advertisement, the panel noted, “free” was presented in capital letters, in much larger type size, and usually in a different color from other type.

It is clear, the panel said, that “Staples is not offering ‘free’ merchandise as suggested by the challenged advertisements.”

 To receive the benefits advertised, the panel noted, consumers must buy the product, register for or be enrolled in the Staples Rewards loyalty program, wait approximately one month to receive the promised Rewards points, and use the Rewards points towards future purchases from Staples within a limited time frame. Even then the consumers won’t receive the promised “free” merchandise if they don’t register for Staples Rewards, don’t use the Rewards points before expiration or if the regular price for the specified product increased in the interim.

Following its review of the evidence, the panel found that the advertising at issue conveyed the message that consumers would receive “free” merchandise with their purchase. Further, the panel found that the disclosures accompanying the offer did not clearly and conspicuously describe all of the material conditions involved in obtaining Rewards points, including the relatively short period in which Rewards points expire.

 The panel said, however, that it was not suggesting that “advertisements involving a loyalty program cannot tout the benefits of participation in such programs, including claims that earned credits can be redeemed later to obtain free products or services.”

 The panel recommended that Staples discontinue the challenged advertisements or modify them to avoid any implication that the consumer will receive a free item with the purchase of an advertised item.

 Staples, in its advertiser’s statement, said that while it disagreed with certain NARB conclusions, the company is a “strong supporter of self-regulation and will take the NARB’s recommendations into account as Staples develops its future advertising.”