Unfair commercial practices law won't ban the term 'free', says BERR

Out-Law News | 05 Mar 2008 | 5:07 pm | 2 min. read

The Government has denied that the term 'buy one get one free' is under threat from new legislation, despite a major retail industry body warning that it was about to be outlawed.

The Government announced this week that new consumer protection regulations will come into force on 26th May, seven weeks later than previously indicated. These implement the EU's Unfair Commercial Practices Directive (UCPD), and restrict how the term 'free' can be used.

Among other things, the Regulations prevent companies from "describing a product as 'gratis', 'free', 'without charge' or similar if the consumer has to pay anything other than the unavoidable cost of responding to the commercial practice and collecting or paying for delivery of the item".

The Institute of Sales Promotion (ISP) has written to members telling them that they can no longer use the term 'buy one get one free'.

"It would appear that 'Buy One Get One Free' (BOGOF) will not be acceptable, but the mechanic will remain perfectly legal and will have to be described as something like 'Two for the price of one'," Philip Circus, the ISP’s director of legal services, told members in a note to them. "This does not stop any existing promotional mechanics. It simply means that the word 'free' cannot be used in relation to them."

The ISP also said that gifts with magazines or other free gifts cannot be described as such. "We believe that this will prevent the use of the word 'free' in relation to free gifts with purchase," said Circus. "The word 'free' will only be possible in relation to free samples and any free gifts which do not require more than the unavoidable cost of a postage stamp or telephone call such as an absolutely free mail-in."

But the Government has assured OUT-LAW.COM that this will not be the case.

"We do not believe the UCPD will prohibit the use of the word 'free' in these cases," said a spokesman for the Department for Business, Enterprise and Regulatory Reform (BERR).

"In the case of 'buy one get one free offers (BOGOFs)' and free gifts with purchases (eg with magazines) the Government take the view that the unavoidable cost of responding to the commercial practice is the cost of buying the product (e.g. the one item in relation to BOGOFs or the magazine with which the free gift comes)," he said.

Richard Parkinson of Pinsent Masons, the law firm behind OUT-LAW.COM, said that BOGOF promotions were an unlikely target of the law, and that it is aimed at misleading promotions.

"The evil that I believe the regulations are attacking is where you are offered something for 'free', but then you need to call a premium rate line or take out a subscription to an unrelated product or make some sort of payment, for example pay an exorbitant postage and packing fee," he said.

"It does not, to me, seem to prevent a BOGOF promotion in a retail environment, as you do not have to pay extra for the free product," said Parkinson. "I can see the literal interpretation that the ISP are making – i.e. to get the free item you have to buy a product and therefore pay more than the unavoidable cost of responding to the commercial practice – but here it is intrinsic to the promotion that you have to buy the initial product."

The new rules ban 31 kinds of unfair sales practices including fake closing-down sales, prize draw scams and aggressive door-to-door selling. They will also order businesses to refrain from trading unfairly overall for the first time.

The Regulations, which were laid before Parliament on Monday, will be enforced by Trading Standards officers and the Office of Fair Trading.