Disclosure

Disclosures and the Hype

This is my endorsement disclosure to adhere to the FTC regulations. Honestly I do it to cover my ass. Likewise, when posting an endorsement of a product on social media, I will us #ad #aff #freesamp and so on. This is covering me under the The FTC Act. Why? Because if you do not disclose your relationship with a manufacturer, seller, developer, etc., the FTC can come after you and the one who endorsed you. At last look, it was a fine up to $11,000 per incident. Yeah. Ouch. I’d rather make a disclosure even if it means the consumer is leery of my honest review.

But what is a relationship? Many bloggers & social media posters don’t understand the definition. And way too Amazon reviewers have no clue. They are being misinformed. Many think that they only have to leave a disclosure if they get paid.

Oh, no, no, no. Let me paraphrase, then quote the FTC rules. It says that if you receive a product or service for free, discounted, or with incentives such as a sweepstakes entry, a gift card, or a promise of a discount on your next purchase, and you publicly say something favorable about the product or service, it is an endorsement. Period.

Now, if you are walking in a mall & a store is handing out free samples to everyone, it is not considered a relationship, and no disclosure is needed when writing about it. The key word is everyone. If only a select number of people get a free sample, say for signing up for something, for purchasing another product (an incentive), there is a relationship.

Here are some FTC quotes. I have shortened them only to keep it simple. But you can go to the FTC Endorsement Guides page and read it in it’s entirety, or, if you’re ambitious, you can read the complete FTC Regulations pertaining to endorsements and testimonials. Both are on the gov website. These were updated May 2015

Do the Endorsement Guides apply to social media? Yes.

If you receive free products or other perks with the expectation that you’ll promote or discuss the advertiser’s products in your blog, you’re covered. Bloggers who are part of network marketing programs where they sign up to receive free product samples in exchange for writing about them also are covered. [“Covered” means under the FTC Act].

Simply posting a picture of a product in social media, such as on Pinterest, or a video of you using it could convey that you like and approve of the product. If it does, it’s an endorsement.

If you write about how much you like something you bought on your own and you’re not being rewarded, you don’t have to worry. However, if you’re doing it as part of a sponsored campaign or you’re being compensated – for example, getting a discount on a future purchase or being entered into a sweepstakes for a significant prize – then a disclosure is appropriate.

Is there special wording I have to use to make the disclosure?
No. The point is to give readers the essential information. A simple disclosure like “Company X gave me this product to try . . . .” will usually be effective.

Social Media

The FTC isn’t mandating the specific wording of disclosures. However, the same general principle – that people get the information they need to evaluate sponsored statements – applies across the board, regardless of the advertising medium. The words “Sponsored” and “Promotion” use only 9 characters. “Paid ad” only uses 7 characters. Starting a tweet with “Ad:” or “#ad” – which takes only 3 characters – would likely be effective.

YouTube?

The guidance for videos is the same as for websites or blogs.

Restaurants?

If you get free meals, you should let your readers know so they can factor that in when they read your reviews.

Disclosures must be “clear and conspicuous”

To make a disclosure “clear and conspicuous,” advertisers should use clear and unambiguous language and make the disclosure stand out. Consumers should be able to notice the disclosure easily. They should not have to look for it.

Endorsement rules:

You can’t talk about your experience with a product if you haven’t tried it.
If you were paid to try a product and you thought it was terrible, you can’t say it’s terrific.

And I think this is the one that says it the best, especially for reviewing on Amazon (Quote in full)…

My company runs a retail website that includes customer reviews of the products we sell. We believe honest reviews help our customers and we give out free products to a select group of our customers for them to review. We tell them to be honest, whether it’s positive or negative. What we care about is how helpful the reviews are. Do we still need to disclose which reviews were of free products?

Yes. Knowing that reviewers got the product they reviewed for free would probably affect the weight your customers give to the reviews, even if you didn’t intend for that to happen. And even assuming the reviewers in your program are unbiased, your customers have the right to know which reviewers were given products for free. It’s also possible that the reviewers may wonder whether your company would stop sending them products if they wrote several negative reviews – despite your assurances that you only want their honest opinions – and that could affect their reviews.

In regards to Marketing Platforms, such as the ones where “reviewers” apply for free or discounted products from “sellers” within their network. My biggest issue at the moment (more on that later)…

I have a small network marketing business. Advertisers pay me to distribute their products to members of my network who then try the product for free. How do the principles in the Guides affect me?

You should tell the participants in your network that if they endorse products they have received through your program, they should make it clear they got them for free.

Affiliates & affiliate linking and earning commission…

…when the affiliate link is embedded in your product review – a single disclosure may be adequate. You could say something like, “I get commissions for purchases made through links in this post.”

I receive products at either a discount or free. In exchange the seller is expecting a review on their website, Amazon product page, and/or additional endorsements on my blog or social media.

Amazon:

Up until October 2016, Amazon allowed products in exchange for reviews because us reviewers were not receiving any monetary compensation. Just the product. All that they required is that you leave a disclosure such as, “I received this product in exchange for honest review.”

On Oct. 3rd, Amazon changed their TOS to:

[Amazon will] prohibit incentivized reviews unless they are facilitated through the Amazon Vine program.

Before I go further, let me state, that this does not effect book reviews. Authors are still allowed to give advance copies of books to readers (ARCs), and you are still allowed to write reviews of them on Amazon (disclosure still needed of course).

Because of the vague wording in Amazon’s Guidelines (quote to follow), sellers, and marketing platforms are telling reviewers they will give them the product at a discount (or free), and since they are not “requiring” a review, they don’t have to leave a disclaimer.

Wrong. Absolutely not. You have read about the FTC guidelines previously. You know a disclosure must be stated for any product you receive and endorse (speak positively about), whether the company asks you to or not. On any public media, even online retailers such as Amazon.

What sellers are doing is trying to circumvent Amazon’s new guideline that state, “Offering compensation or requesting compensation (including free or discounted products) in exchange for creating, modifying, or posting content.” and saying that the product in not “in exchange”, and so a disclaimer saying “I received this product in exchange for honest review.” is no longer needed. Well, according to Amazon, yes. According to the FTC, no.

At this point in time, if you choose to do a review on Amazon of a product you receive with a promotional code, or you write a disclaimer saying “in exchange”, Amazon will either refuse to post it, or will immediately remove it if it gets past their robots. Account holders of reviewers who are trying to post incentivized reviews are having their accounts wiped. I opened my Amazon account when they started. Personally, I will not risk my 16-year old account for a bottle of vitamins or a nightlight.

Sellers are now trying to talk reviewers into accepting gift cards or paypal payment so a promo code won’t show. Is this legal? Through the FTC, yes. But it is against Amazon’s TOS. It is considered “compensation”.

According to Amazon’s new TOS, the following is not allowed:

Creating, modifying, or posting content in exchange for compensation of any kind (including free or discounted products) or on behalf of anyone else.

Period. Don’t take it out of context, don’t change the wording. Just that.

Leaving an FTC disclaimer isn’t just for products sold on Amazon. Amazon’s TOS (Terms of Service) are separate from the FTC regulations. It must be adhered to on Any storefront or public media. Plus, you must find out what that storefront’s TOS are before leaving a review. Everyone now knows Amazon’s, but do you know Ebays? Toys R Us’? If you get a product, and are told you can write a review on Walmart, Home Depot, or even their personal website, it’s still an endorsement and needs a disclaimer according to the FTC. But you also must find out if the storefront allows compensated reviews.

Rule #1… If a seller tells you not to leave a disclaimer, don’t work with them.

Will the FTC come after the reviewers who don’t leave a disclaimer? Probably not, and they are expecting that. However, with the influx of obvious non-disclosed reviews, the FTC will notice, and so will Amazon, and probably other storefronts. Then at some point in time, everyone will be under scrutiny, and all this will change again.

Personally, as a reviewer, I think a personal blog and social media outlets are great for getting a company’s product information out there. It’s advertising for the company whether the endorsement is paid or for a free product. Reviews are obviously something every seller wants. If you review for a seller or manufacturer, just make sure you know the rules, and cover your ass. That’s all I’m sayin’.