In recent years, the restrictions on advertising and sales have become a little bit more “relaxed”.
In 2001, German legislators started working on solving old prohibitions. The Ordinance on Bonuses of 1932 (Zugabeverordnung) and the 1933 Discount Act (Rabattgesetz) were abolished. 2004 saw the renewal of the German UWG (Act on Unfair Competition) : the Federal Supreme Court has abolished bans on the provision of gifts and coupling offers, discounts and special events. UWG is the law on unfair competition. The exemptions allowed more independence in the design of advertising and sales. Some particular restrictions are however still present and shall be respected: offers must not mislead customers and should be transparent.
Since 2004, the components of an offer no longer need to be related. Individual prices are no longer necessary. The seller can offer free bonuses, regardless of whether they are valuable or worthless. However, the following restriction applies: The seller must price the components of his offer for which the customer does not have the opportunity to estimate the price. He must also indicate the conditions for the discount or the free bonus. He shall not mislead the customer, for example by promising him an encore that is supposed to be very valuable, but in reality has no value. If a businessman makes an exclusive offer to a customer that every customer can then get, that is prohibited.
Discounts are price reductions that are deducted from the purchase price, such as cash discounts, volume discounts or vouchers. Excessively high discounts have been permitted since 2004. The discount amount and its reason must be clearly stated. Example: Discount only for minimum sales or at certain sales times. However, it is forbidden to promise the reimbursement of a price difference when comparing prices if no other supplier offers the product. The sales staff may not put the customer personally under pressure with a discount.
At special events, large parts of the product range are reduced. These events are specially promoted. The advertising suggests particularly favourable bargains to the customer. Example: end-of-season, clearance or anniversary sales, large special offers at store openings or city festivals. The following restriction applies: the occasion for the advertised event must be real, e.g. 50th anniversary. If the goods are second-class in relation to the conventional assortment and were specially produced for the special event, this must be clearly emphasised in the advertising. Reducing the price is only permitted if the goods have been offered for long enough with the original price. If a product is advertised, it must be in stock for at least two days.
The following applies to any sales strategy: If a reasonable consumer is so strongly attracted by an offer that rational considerations take a back seat to it, it is prohibited. Example: Offers are only valid for such a short time that no price comparison is possible. If a lottery is offered as bait, this is forbidden because it encourages the desire to play. It is also forbidden to offer an encore to persons who have to make an objective decision under the responsibility of a third party. Example: Offering doctors prescription drugs plus gifts would be such a violation.
As a businessman and customer, don’t be surprised by advertising traps.