False advertising is defined as “the use of false or misleading statements in advertising, and misrepresentation of the product at hand.” Since advertising has become a common tool for companies, brands must be fully committed to ensuring all promotions and products are accurate.
This past week it was reported that Target will be paying nearly $4 million to settle an ongoing lawsuit. Northern California lawyers filed the suit because they claimed Target’s product prices were higher than originally advertised. In the lawsuit, they are also being accused of pricing differences at the checkout for products that have to be weighed.
A Target spokesman responded by stating that some promotional signs were not removed in a timely manner after the promotion was over, resulting in a advertising a price that was no longer valid. Due to the inaccuracies, the company is dedicating itself to more improved price-accuracy techniques.
In just this year there have been numerous alleged false advertising cases. Cablevision sued Verizon for false WiFi advertising; Vitamin, Supplement Industry is claimed to not properly advertising health risks; and a woman even sued the film Fifty Shades of Grey for misleading expectations.
But how is a company really affected by its false advertising? Consumers can lose trust in the business and the brand may have to pay large amounts to settle lawsuits. For a company as prominent as Target, consumers who once trusted the brand may not any longer. By misleading the public’s perception, it can ultimately change the consumer’s behavior–such as purchasing.
The Federal Trade Commission works diligently to protect consumers in a competitive market. In 2010, Kellogg’s Rice Krispies had been caught by the FTC for making false health claims on the box of cereal and had to stop advertising until the claims were accurate.
Advertising is initially intended to persuade consumers to act, but when those advertisements are false, it can backfire. Because Target made a public statement that they are working to improve their price-accuracy methods, it is an attempt to maintain their consumers’ credibility.
Do you think there’s a difference between false advertising prices versus health claims?
-Kaitlyn Russell, Hannah Rodgers, Anna Joy Zima