The National Advertising Division (NAD) recently reviewed advertising by the United States Postal Service after a consumer challenged the claim “$50 insurance included in Priority Mail service” on the USPS website. The consumer mailed a $100 gift card using Priority Mail service, but when the package was lost, the consumer received only $15 plus a return of the amount paid for postage. USPS argued that its Domestic Mail Manual controlled, which provides that the maximum indemnity for negotiable items is $15. NAD disagreed, as the website stated the “$50 insurance included” without any reference to the Domestic Mail Manual.
The USPS asserted the challenged claim was appropriately qualified by language in the “features” section of the website which states that consumers will receive “up to $50 of insurance with most shipments.” However, NAD also took issue with that qualified claim. In order to make an “up to” claim, an advertiser must demonstrate the maximum savings is obtainable by an “appreciable number” of consumers under normal circumstances. Given that there are 33 listed exceptions to the “$50 insurance” claim in the Domestic Mail Manual, NAD found that it was unclear whether an appreciable number of consumers would be entitled to the advertised $50 insurance. Further, NAD also concluded that the disclaimers did not clearly and conspicuously inform the consumer of the class of persons who can achieve the maximum level of the performance claim, as is required when the maximum results can only be achieved under limited circumstances. The disclaimers were not clear and conspicuous because 1) they appeared in very small print; 2) the footnote did not refer to all exceptions listed in the Manual; and 3) the hyperlink provided to the Manual took consumers to the general landing page as opposed to the specific disclosure that applied, as is recommended by the FTC’s .com Disclosures guidance.
Interestingly, the USPS asserted that the FTC has limited jurisdiction pursuant to federal law over Postal Service matters, including advertising, and therefore it was not required to submit to NAD proceedings. While noting that the USPS’ participation was voluntary (as is the case with all advertisers), the NAD concluded that it did have jurisdiction over the national advertising that was the subject of the challenge.
TIP: When using hyperlinks to make a disclosure, the FTC recommends that they should be clearly labeled and direct a consumer straight to the specific relevant disclosure – the less a consumer needs to search after clicking through a linked disclosure, the more clear and conspicuous the disclosure is likely to be.