Both federal and state law regulate advertising, so your small business needs to keep that in mind when drafting ads and promotional materials.  What you intend your ad to say is not nearly as important as what it actually says when it comes to deceptive advertising.  Should you include a false or misleading statement in your advertising, you have violated the law and even being unaware that the information was false won’t necessarily protect you from penalties.

The Federal Trade Commission (FTC) is the primary federal agency that investigates and penalizes instances of unlawful advertising.  Remember, though, that state and local agencies may also take action against businesses that have violated advertising laws, most often via the state attorney general, the local district attorney, or the consumer protection agency.  Additionally, consumers and competitors can also sometimes take action against the business who practiced unlawful advertising.

The following guidelines can help you keep your ads on the legal side of the fence:

1.  Accuracy, accuracy, accuracy! This may be the most important guideline to follow.  All ads your company places must be factually accurate and not mislead or deceive the public.  For instance, any product pictures you post should accurately represent whatever it is you’re advertising.  Also, don’t make any wild claims or exaggerations about what your product can do for customers–keep it to what has actually been proven.

2. If “quantities are limited”–say so! Your company should either make sure to have enough quantities of product on hand to meet any reasonable demand, or it should specifically state in the ad that “quantities are limited.”  Sometimes it’s a good idea to actually state the amount of units available.  Some states require that merchants provide “rain checks” whenever they run out of advertised goods, so be sure you understand all such requirements in your jurisdiction.

3.  No such thing as a free lunch–except when there is. If your ad states that something is “free” then it must be completely free unless you clearly state whatever terms or conditions apply.  For instance, if you’re providing a “buy one, get one free” sale, that should be stated implicitly.  Alternatively, if you’re offering up something free with the purchase of something else, make sure that (a) you don’t charge more for the purchased item than you usually do, (b) do not reduce the quality of the purchased product or whatever types of services you offer with the purchased product, and (c) disclose all pertinent conditions, limitations, and terms that apply.

4.  Precision is key.  Be precise whenever describing sales or savings.  Any claims or descriptions of prices should be completely accurate and not misleading.  Do not make up or doctor the pricess of competitors or your own prices when doing price comparisons, for instance.

5.  Asking permission trumps asking forgiveness every time.  If you want to feature someone’s picture or endorsement in your ad, you must ask for permission ahead of time rather than asking for forgiveness later.  In other words, don’t use the names or likenesses of celebrities or national organizations without first obtaining written permission.  Remember that verbal permission could later be rescinded, or that miscommunication can occur.  You can research U.S. copyright law and the “fair use” doctrine if you want to see which types of limited quotations are allowed without permission.