Advertising goods and services that you cannot supply in order to get people into your shop or an online sale is known as 'bait advertising' and is illegal.
Reasonable timeframe, reasonable quantities
If you advertise goods or services for a certain price you must be able to supply these for a reasonable period of time (or the time shown in the advertising eg, 1 week only). You must also be able to supply a reasonable quantity (or the quantity shown in the advertising eg, only five left).
There is no exact definition of what is meant by a 'reasonable period of time' or 'reasonable quantities'. In practice, this will depend on the market in which your business is operating, the likely demand based on experience, the attractiveness of the offer and the nature and extent of the advertising.
Qualifying statements
General qualifying statements such as 'while stocks last' could still leave a business open to charges of bait advertising if reasonable quantities of the advertised product are not available. Any limits on an offer should be stated, for example, 'one per customer', 'offer ends 1st March'. If stock is not available and consumers are being invited to place orders for it, then any advertising needs to make this clear.
Example: A company advertised a sale of beds on the radio and in newspapers. The newspaper advertisements noted that, for some lines, stocks were limited, but the radio advertisements did not. Two of the cheaper lines of beds were in fact sold out while the radio advertisements for them continued to run. The company was convicted and fined.
Advertising deadlines
Because of advertising deadlines, some businesses place advertisements for goods before they actually have them on hand. Sometimes, advertisements for goods ordered from overseas are placed in anticipation of their arrival. Your business should be careful to make sure you have reasonable grounds to believe the goods will be available when the advertisement appears.
Example: A furniture store experienced shipping delays on two containers of desks for a promotion. As a result there was insufficient stock available of the desk models promoted in television and newspaper advertisements. The advertising stated that the desks had just arrived. The company was aware of the delay 2 weeks prior to the advertising campaign, but failed to amend or stop its advertising. The company was convicted and fined.
Online claims
If you have an online presence, it is important that your website is kept up to date so that stock or special offers that are no longer available are not promoted.
Rain-checks
There may be times when, through no fault of your own, your business is unable to supply goods or services as advertised. Businesses should have a 'rain-check' system in place to ensure that if this happens, you are able to offer to supply or procure the goods or services, or equivalent goods or services, at the advertised price as soon as possible. The goods or services should be provided within a reasonable time if the rain-check is accepted by the customer.
A proper rain-check system not only ensures that customers' needs are met, but also eliminates the risk of prosecution for failing to supply goods or services as advertised.
