It can be easy to run into difficulties if your sales are being structured in an improper manner — or in a manner that appears to be improper — even if you are advertising truthfully!
The historical danger in advertising a sale is more often the way in which the sale is advertised, not the sale itself. The first problem is advertising “factory-direct” rebates or “manufacturer savings.” Don't do that unless you can prove that those incentives are really from a factory or a manufacturer. If they are, make sure you have a record.
The other big offender in sale advertising has been what I refer to as the “rolling sale,” in which a contractor runs some type of continuous sale or discount throughout the year. If you run a sale more often than you don't run the sale, then there is no regular or “non-sale” price. A basic rule of thumb is that if you have a sale more than six months out of 12, your sale price is not really a discounted price but is actually your regular price. One possible solution is to vary the discount by product and throw other incentives into the mix.
For example, you might offer a free appliance upgrade in January, followed by free foam backing for vinyl siding in February, and a spring sale event in April on all products. If you use or pass through discounts from a manufacturer or lumberyard, ask them to mix the incentives on a regular basis, and make sure you have some proof that the discounts are really from a third party.
The goal is to mix and match sales, coupons, free products, etc., so that you don't have a “rolling sale” but still have the sales and incentives in place to power lead generation.
Keep in mind that a similar problem often occurs when selling at a discount to your “list price.” Be careful with that type of marketing. If, in fact, you never sell at “list,” then it is not really your list price. Advertising that you are offering a price that is less than your list price can be considered deceptive advertising if you can't show that you really sell at your list price in the first place. For some contractors, in fact, the “discounted” price is really their typical starting price, and product is never really sold at the list price — and that is an advertising trap you should avoid. — D.S. Berenson is the Washington, D.C., managing partner of Johanson Berenson LLP (www.homeimprovementlaw.com), a national law firm specializing in the representation of contractors and the home improvement industry; 703.759.1055, firstname.lastname@example.org.
This article is for informational purposes only and should not be construed as legal advice.