In terms of the Consumer Protection Act, a promotional offer means an offer or promise expressed in any manner of any prize, reward, gift, free goods or services, price reduction or concession, enhancement of quality of quality of goods or services, irrespective of whether or not acceptance of the offer is conditional on the offeree entering into any other transaction. It should be noted that a person must not make a promotional offer with the intention of not fulfilling it at all, or, fulfilling it other than was offered.
There are requirements set out in the Act which the promotional offer must clearly state:
- The nature of the price, reward, gift, free goods or services, price reduction, concession, etc;
- The goods and services to which the offer relates;
- The steps required by the consumer to accept the offer or to receive the benefit;
- The details of any person from whom, the place where, date and time the consumer may receive the prize reduction, free thing etc.
Further obligations are placed on the person who makes or sponsors the promotional offer. This person must:
- Ensure that the supply at the particular price, gift, reward, etc is sufficient to accommodate all reasonably anticipated demands resulting from the offer,
- Not limit or restrict capacity to supply any goods or services on any basis other than that it applies to such a supply in exchange for any other consideration,
- Not expect the consumer to accept an inferior quality of any goods or services than those generally available,
- Not expect any consumer when he/she tenders a coupon to pay an administration, processing or handling fee.
However, there are defences to an alleged failure to comply for suppliers. This is where the supplier offered to supply or procure another person to supply, to the consumer, a comparable good/service of the relevant kind to satisfy the consumers’ acceptance of the promotional offer and the consumer accepts same. A further defence to an alleged failure to comply with this section would be that the consumer unreasonably refused such offer.
In light of the above, the Consumer Protection Act sets out strict guidelines which trade coupons and similar promotions need to conform to. Section 40 of the Act further states that it is unconscionable conduct for a supplier to knowingly take advantage of the fact that a consumer was substantially unable to protect the consumer’s own interest because of ignorance etc. Therefore suppliers, by following these guidelines, assist consumers to understand that which they are getting themselves into.