Black Friday and Cyber Monday Sales: Legal Rules for Advertising Discounts

The FTC's Guides Against Deceptive Pricing say a "former price" is only a fair comparison if it was a real price you offered regularly, for a reasonable stretch of time. If it wasn't, the "bargain" isn't real. Many states add their own sale price advertising rules, too.

A little prep before the rush can help you run a strong sale without surprises.

Can you prove your original price was real?

If you advertise a discount from your own former price, be ready to show that price was real. It should be the price you actually offered customers, regularly, and for a reasonable amount of time. Raising a price right before a sale and then "cutting" it doesn't qualify.

Some states go further and set specific timeframes, so check your state's rules.

Other comparisons need care, too. "Compare at" prices, like a competitor's price or a list price, should generally reflect what the product really sells for in your area. And if your offer has conditions, like "buy one, get one," the FTC guides say all the terms should be clear from the start.

What can go wrong during holiday sales?

Three problems come up often during holiday sales:

1. A wrong price. Whether you must honor an advertised price mistake depends on your state, your terms of sale, and when you accepted the order. Many sellers state in their terms that an order isn't final until it ships or is confirmed. If you might cancel orders at a mistaken price, say so in your terms, act quickly, and refund customers. And don't advertise a price you don't plan to honor.
2. Running out of a doorbuster. The FTC's Guides Against Bait Advertising say you shouldn't advertise a product unless you have enough to meet reasonably expected demand, unless your ad clearly says supply is limited. Saying "limited quantities" or listing the number available helps. Rain check laws vary by state, and some states require them in certain situations, so check yours.
3. Shipping dates. Under the FTC's Mail, Internet, or Telephone Order Merchandise Rule, you need a reasonable basis to expect you can ship within your advertised time, or within 30 days if you don't state one. If you can't, you generally must tell the customer and either get their consent to the delay or refund them.

Questions to ask before your sale starts

• Can I prove the "original" price I'm advertising was a real price? Do I have records showing how long I charged it?
• What if I post the wrong price or run out of a doorbuster item? Do my terms explain what I'll do, and do I know my state's rain check rules?
• Are my sale terms, exclusions, and return policy clear and easy to find? Would a customer see them before they buy?
• Can I actually meet the shipping dates I'm advertising? What will I do if there's a delay?

What to do next

1. Review your price history. Check every item you plan to discount, and save records of what you charged and when.
2. Spell out your terms. Put sale exclusions, limits, and your return policy in plain language, close to the offer.
3. Match your ads to your stock and shipping. Set quantity limits, say so in the ad, and don't promise dates you can't meet.
4. Update your terms of sale. Cover price errors, rain checks, and cancellations. Ask our AI legal assistant for a terms-of-sale starter, and talk to an attorney about your state's rules.

Accurate prices and clear promises build the trust that brings holiday shoppers back. A little prep now keeps your sale running smoothly.