Tips from the Australian Competition and Consumer Commission
Travel and tourism industries contribute significantly to local economies. Good business practices help such industries guard their reputation. Part of this is creating a strong impression through effective advertising. Councils work closely with their tourist associations and associated industries to attract visitors to their area.
Imaginative promotion of products or services is a normal part of attracting customers, but misleading advertising can damage long term business, and the area in general.
Familiarity with the Trade Practices Act, especially the advertising provisions, helps businesses know their rights and their obligations. Here are some points for all stakeholders in the local area to consider.
Put yourself in the shoes of customers and ask what impression will the ad give? Will it lead them to make a wrong conclusion about the quality of a product for example when advertising a holiday – will the ad raise expectations too high or underplay the real cost? If so, amend the ads because the reputation you want to develop is one for honest trading.
This will bring customers back and their word of mouth recommendation to neighbours and friends is the best form of advertising – and it is free! Advertising ‘discounts’ should be treated cautiously. Customers have a right to ask, ‘discounted from what’? If a holiday package is being offered for the first time the price listed cannot mean a discount.
Bait advertising can be used to ‘lure’ customers into agencies. However, specials should be in a reasonable number and on offer for a reasonable time. For example, it could be unlawful to advertise a $500 return airfare to Fiji when only six were available and the rest cost $800. If you have offered special deals and genuinely misjudged demand then allowances can be made under the Act.
It is not good business practice to bury terms and conditions in fine print. Fine print should be used carefully and again it is the overall impression that counts. The fine print in ads should be easy to find, easy to read and should not contradict the large print.
The use of an asterisk to direct a customer’s attention to a qualifying footnote may not be good enough to ensure full disclosure. Some people have tried to escape liability for misleading conduct by including ‘entire agreement’ clauses in the fine print. Such clauses basically say that the parties cannot rely on what was said in or before pre contractual negotiations. Instead, the entire agreement is supposed to be contained in the written contract. However, those using such clauses can still be guilty of misleading or deceptive conduct.
You may be tempted to boost custom by comparing your prices with those of competitors. This is legitimate as long as the prices compared are accurate and the savings implied are real, not illusory. The word ‘free’ in relation to price can be a powerful marketing tool. But take care with its use. For example, it can be wrong to say ‘ buy one and get something free’ if the price of the first item has been increased to largely offset the cost of the second.
Third line forcing occurs when a business will only sell a good or service if the purchaser also buys another business’s goods or services. For example, a travel retailer cannot direct the client to buy travel insurance from a nominated company. However, the sale of ‘holiday packages’ is not third line forcing as it is a total package comprising all services.
For more information see the ACCC’s booklet on Travel and Tourism – and the Trade Practices Act.
For details please call the ACCC Infocentre on 1300 302 502 or visit the ACCC website www.accc.gov.au.
* Copy supplied by ACCC
