Buy One, Get One – or “BOGO” offers – are popular with consumers and almost ubiquitous in grocery stores and other retailers across the country. Although retailers have a lot of flexibility in how to structure those offers, they need to ensure that the offers aren’t structured in a manner that overstates the amount of money that consumers can save.
Last week, consumers filed a class action against Safeway and its parent company alleging that the grocer unlawfully inflates the regular retail price of products used in buy-one-get-one-free promotions, causing consumers to effectively still pay for the “seemingly” free product. For example, the complaint alleges that Safeway sold a product for $7.47 one day and for $10.99 the next day, as part of a BOGO offer.
The complaint cites the FTC’s guides on using the word “free” – which state that a consumer “has a right to believe that the merchant will not directly and immediately recover, in whole or in part, the cost of the free merchandise … by marking up the price of the article which must be purchased” – and argues that the guides should be persuasive in determining whether a practice violates state law.
It’s too early to tell how this case will turn out or how the FTC’s guides, which were adopted in 1971, will apply today in a context in which some retailers adjust their prices frequently. It’s likely that these types of suits will continue as bargain conscious consumers look for sales, though. We’ll keep our eyes open for updates. In the meantime, you can click here for more developments on pricing and sale practices.