Promotions and price reductions are powerful tools in the retail sector, and are subject to legal regulations. From sales and liquidation sales to special offers, coupons, contests and price comparisons, retailers must strike a balance between effective marketing and legal compliance. In this blog series, we explore key legal principles to help navigate promotional strategies as well as the main pitfalls. It is not an exhaustive overview of the rules but rather a guide to the main points to keep in mind.
This series will cover:
- Price reduction announcements: the legal framework and best practices
- Sales periods: rules, restrictions, and compliance
- Liquidation sales: when and how to legally conduct them
- "Buy One, Get One Free?" The legal do's and don'ts of joint offers
- Promotional contests: how to organise them without legal risks
- Coupons and vouchers: don't forget the required information
- Gift cards: legal considerations and recommendations
Professional legal support is highly recommended when running promotional actions, whether for examining envisaged promotional actions, validating advertising material or drafting the applicable general terms and conditions. Indeed the Economic Inspection keeps a close watch and can impose heavy penalties on retailers failing to comply with the rules.
Part6 –Coupons and vouchers: don't forget the mandatory information
This sixth part of our "Retail promotions & pricing: legal essentials for businesses" series lists the mandatory information to be provided when issuing titles giving a right to a discount, a subsequent refund of the price or a part of the price (such as coupons, vouchers etc.).
Coupons and vouchers are commonly used by retailers to offer discounts or partial refunds on purchases. However, to ensure transparency and legal compliance, certain essential details must be included.
What is a cashback coupon?
A cashback coupon is a coupon provided by a retailer to customers upon purchase of a product or service, allowing them to claim a partial or full refund at a later stage.
For example, in a promotion such as "€50 cashback on the purchase of a laptop", the customer buys the laptop at full price and then submits the cashback coupon along with their proof of purchase to receive a €50 refund via a bank transfer or store credit.
What information is required on cashback coupons?
When a retailer issues such a cashback coupon, it must clearly state:
- The name, address, and, if applicable, the company type and registration number;
- The amount that will be reimbursed;
- If the offer is time-limited, then the expiry date must be indicated.
- The terms and conditions of use: including the steps required to claim the refund and the timeframe within which it will be processed. If these details are provided in a separate document, then they do not need to be printed directly on the coupon or voucher.
What about free vouchers?
This refers to vouchers issued free of charge by a retailer that grant the holder an immediate price reduction when purchasing one or more goods or services (e.g. "€5 off your next purchase of €50 or more").
Any retailer that is presented with a title that has been distributed free of charge by itself or by another company and that enables its holder to obtain an immediate price reduction on the purchase of one or more goods and/or services is obliged to accept it when the conditions of the offer are fulfilled.
If a voucher has been issued by a third party (such as a manufacturer offering a discount at a retailer's store), then the retailer is only required to accept it if the voucher clearly specifies:
Clear and transparent communication is essential when issuing coupons or vouchers. By including all the necessary information, retailers can ensure smooth transactions, avoid disputes, and maintain customer trust.
The name, address and, if applicable, the company type and the supplier's business number;
- The amount of the reduction;
- The goods or services to be acquired to use the title;
- The stores where the title may be used, unless it can be used at all points of sale where goods or services are offered for sale;
- The period of validity of the right, unless the right is unlimited in time.
Conclusion
Clear and transparent communication is essential when issuing coupons or vouchers. By including all the necessary information, retailers can ensure smooth transactions, avoid disputes, and maintain customer trust.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
