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NAD Finds "Limited Offer" Claim Misleading, Recommends Discontinuance

Marketers frequently tout “limited time” bonus offers that appear to continue for an inordinate amount of time.   A recent decision of the National Advertising Division ("NAD") of the Council of Better Business Bureaus relating to such an offer makes clear that a “limited time” offer must indeed be so.

In a decision published earlier this month, the NAD recommended that Nectar Sleep LLC (“Nectar” or the advertiser) discontinue an express claim promoting its Nectar Mattress—“LIMITED OFFER: $125 Off + 2 Free Pillows”—which falsely implied that the mattress was previously sold at a higher price and that the pillows were available for purchase.

The claim, which appeared in Nectar’s retail, online and social media advertising, was challenged by competitor Tuft & Needle, LLC. The NAD was compelled to determine the merits of the case after Nectar represented that it would permanently discontinue the claim at issue, but failed to do so.

Based on the evidence in the record, the NAD determined that the claim was misleading to consumers because it did not appear (i) that the Nectar mattress was ever offered for sale at the “regular” price prominently displayed on its website or in its retail advertising or (ii) that Nectar’s offer for “2 Free Pillows” had been made available to consumers for a limited amount of time.

Read NAD’s press release here.

Takeaway: While price competition ultimately serves to benefit consumers, the NAD emphasized that such benefits are only realized when comparative pricing claims are accurate and enable consumers to properly assess the value of a bargain or sale.  Creating a sense of urgency is important to marketers; however, such claims must be factually accurate.  Therefore, they must not only clearly communicate their pricing claims but also ensure that a limited time offer does not create a false sense of urgency and that the discount promised is bona fide and not based on a markdown of a fictitious former price.  

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