Discount prices are supposed to lure customers into purchasing a commodity since the prices seem lower than that of the competitors. It is against the state and the federal law to mislead the customers through advertisement. The consumer protection rights demand that ad presents the truth of the matter even as it regards to the price of the commodities. Notably, it is against the law to take advantage of the consumers ignorance even if that information given does not seem to fool anyone. Apparently, the goal of this deceptive advertising is to make more sales than the competitors which should not be the case.
The normal prices of commodities in the markets are set by the sellers who use various pricing strategies to fix the appropriate price. Thus, should the retailer decide to increase their sales volume through promotion or discount prices, then it is acceptable. However, when sellers use the discount prices that are untrue to attract more customers and if possible draw customers from the competitors, then there is a legal liability, and the consumer can sue the company. This deception occurs through suggesting a particular change in price like suggesting that a commodity is then selling maybe $10 less while in real sense the price has never been higher than the one being suggested by ten dollars. This regulation by the government is enacted through the Competition Act that requires businesses to compete in a favorable manner and a healthy environment. Promotion and advertisement are allowed as long as they happen within the provisions of the law. The law also demands that retailers should not advertise the price of a commodity then the actual sale be different. However, businesses are excused should they state that the price suggested was in error. This is a potential loophole since sellers can deliberately set a price and indicate that it was a mistake only for them to take advantage of the customers before withdrawing the advertisement.
Thus, one company can sue another for engaging in deceptive advertising. The Federal Trade Commission holds businesses liable for manipulative advertisement. Notably, the commission demands that firms be truthful and ensure that the consumers are protected. This commission has seen charging of weight loss companies for marketing and providing unrealistic information. The AVS marketing was suggesting a pill that would ensure weight loss in eight weeks regardless of the food taken which was untrue (Lu, Bock, & Joseph 2013). It was through the Commission that the company faced a lawsuit and the public was warned against it. This was in incredible step, but the implementation of this law in a generic sense is questionable sometimes since its full operation happens when clients report the matter and prove that deception was used to attract customers. It should be appropriate that regular checkups and assessment be carried out to identify the malicious business owners who desire to make money at whatever cost. Sometimes the loopholes available manifest in the legal process that one must be involved in to get their justice if they purchased a commodity resulting from the deceptive message. Thus, most buyers upon realizing that the seller is manipulative seek another merchant where they can get their products from. Since no legal action was taken, more and more customers will continue being manipulated. Sometimes the legal implications and costs of following that matter in the court are so high that a single consumer will not take up the issue. Only the major customers who purchase commodities of high value can get return following the legal process. Also, once the business realizes that the legal implications may be at hand, some change their tactic to another. Thus, there remains no evidence of manipulation of the customers.
Additionally, the public is not well informed of the existence of the legal provisions that ensure that they are protected from manipulative retailers. Thus, the retailers can take advantage of the customers ignorance and continue in that advertising. When the laws become stringent demanding that businesses should not advertise any discount that was inexistent, some businesses give a high price for a few days so that by they suggest that the price was changed it would be true and thus it would not be regarded as manipulative. However, the motivation of tagging a high price that they knew that a few people would be purchase was for manipulation. From this situation, it is possible to depict that this legislation is not comprehensive enough to protect the consumers. The law also restricts sellers from terming commodities as free offers while in reality the price of the free commodity is attached to another accompanying product that should be purchased. However, it is impossible sometimes to prove that the offer is not for free. For instance, a company may devise a new method of production that necessitates a reduction in the price. However, a company a may choose to maintain the original price but add a commodity on offer whose price is taken care of in the major product. As such there are strings attached that the law enforcers may not identify since they are not involved in the production process. Also, as much as the law is protecting the consumers, in a way it denies the business owners from utilizing their liberty in structuring their marketing strategies.
This legislation that aims at protecting the consumers from the retailers can have huge economic impacts on the business when the lawsuit is filed. For instance, the customers are favored since they are not only refunded the money but are also given other funds coiled into damage fees, etc. Also, the defendant pays for the plaintiffs attorney fees thus at the end of the engagement the business loses like thrice the amount that was supposed to pay. Thus, this law is quite ineffective because if it were to work the way it was intended to function, the defendant, when proved guilty, would be required to pay only for the damages. A law should not create inequalities such that it becomes difficult for businesses to bounce back financially after the lawsuit. In fact, this can increase the probability of malicious business deals that manipulate the customers such that in the case of any legal liability, the business will have made abnormal profits and thus no huge financial impacts. Thus, in the long run, the vicious cycle of customer manipulation will continue. However, should be businesses pay what is due and reasonable, then it can be possible to operate within the legal provisions.
Hosseini, S. B., Anand, D., & Azizi, S. (2016). Advertising on Trial-Truthful responsibility at the heart of advertising. International Journal of Research, 3(8), 428-440.
Lu, L., Bock, D., & Joseph, M. (2013). Green marketing: what the Millennials buy. Journal of Business Strategy, 34(6), 3-10.
Rhodes, A., & Wilson, C. M. (2016). False Advertising.
Richards, J. (2013). Deceptive advertising: Behavioral study of a legal concept. Routledge.
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