By Jimmy Asa
Business Standards Specialist
The "pants lawsuit" may have been regarded as one of the most frivolous cases in American history, but it did remind business owners to take care when they advertise.
In 2005, Roy Pearson sued his local dry cleaners over a pair of lost suit pants. The dry cleaners had a sign in the window that said “Satisfaction Guaranteed.”
Mr. Pearson lost the case, and wasn’t awarded the $67 million that he originally sought from the business. The Superior Court of the District of Columbia found that the phrase doesn’t mean that the customer is entitled to anything that his or her heart desires.
However, with a "satisfaction guaranteed" claim, consumers can reasonably expect a full refund if they aren’t satisfied. In the end, the court found that the business offered Mr. Pearson more than the value of his pants.
BBB advises both businesses and consumers to be aware of the meaning of "Satisfaction Guaranteed" claims.
Not only the court, but also the
Federal Trade Commission (FTC) guides and the
BBB Code of Advertising call for a full refund with a "satisfaction guaranteed" claim. BBB advises businesses to think critically about using the phrase “satisfaction guaranteed” in advertising.
When "satisfaction guaranteed" or similar claims are used in advertising, any material limitations or conditions that apply to the guarantee should be clearly and prominently disclosed.
As part of its local Advertising Review Program, BBB Dallas reached out to businesses with information and guidance on the BBB Code of Advertising and “Satisfaction Guarantees.” Several businesses have responded with questions, and some have made changes in their advertising voluntarily.
Going forward, BBB Dallas will ask businesses advertising "Satisfaction Guaranteed" to substantiate that a full refund is offered, and if not, to make appropriate modifications.
BBB also advises consumers to read and understand any terms and conditions for any guarantee, including "Satisfaction Guaranteed" claims. Guarantees often have requirements, restrictions, or limitations that consumers would want to know about.
BBB notes that the FTC Guides state, " 'Satisfaction’ and ‘Money Back’ guarantees constitute an offer of a full refund for any reason. {16 C.F.R. §239.3}.”
The BBB Code of Advertising, section 8, states:
"Satisfaction guarantee," "money back guarantee," "free trial offer," or similar representations should be used in advertising only if the seller or manufacturer refunds the full purchase price of the advertised product at the purchaser's request.
It’s easy for businesses to take a few steps to avoid consumer confusion with clear and straightforward advertisements.
Businesses that don't offer a full refund may use a different claim. Phrases like, “customer service is our highest priority” and “customer service promise” give the impression that a business will work to remedy dissatisfaction. However, these claims don’t give the impression that a full refund will be issued.
Businesses that do intend to give a refund should be sure to disclose any material limitations to the guarantee. Here are a few examples of how limitations can be disclosed:
1. We guarantee your satisfaction. If not completely satisfied with ABC product, return the unused portion within 30 days for a full refund of the purchase price.
2. Satisfaction Guaranteed! Full refund available upon written request within 60 days of purchase.
3. Just return the ABC product in its original package within six months and we will fully refund your money, no questions asked.
To learn more about the BBB Code of Advertising and BBB Advertising Review, visit
http://dallas.bbb.org/dallasadreview/.
