Publishers May Feel Heat Over Wording of Soft Offer
The direct mail solicitations, also known as soft offers, often read something like this: "Send me the next issue of the magazine -- free! If I like the magazine, I pay only $18 for the next 11 issues (12 in all). I save over $9 off the cover price! If I decide not to subscribe, I'll return the invoice marked cancel, keep the free issue and owe nothing."
"We know there is a problem [with these types of offers]," said Michael Pashby, vice president of circulation marketing at Magazine Publishers of America, a trade association based in New York. "The soft offer is the most broadly used promotion in magazines, and people regularly do find that consumers are confused by it."
Some states allow individuals to initiate legal proceedings on behalf of all consumers, according to John M. Hadlock, a partner at Whitman Breed Abbott & Morgan LLP, New York. This has spurred a few to take measures against publishers, saying that the free issue is not actually free because a subscription is automatically entered under the consumer's name. About 20 individuals have threatened court action against publishers, and three have actually filed suit, according to Hadlock.
"Merely saying, 'If I like the copy, I'll pay X dollars and get 11 more,' might suggest that the decision about whether to take 11 more will be made after the consumer gets the free copy," Hadlock said. "But the truth is it doesn't work that way. An order is usually entered when you send back the card accepting the free issue."
Hadlock points out that a publisher's safest bet is to use language that is more straightforward and suggests copy that states: "Send me my free issue and enter my subscription." That, said Hadlock, is an authorization to enter the subscription then and not later.
"The wording is tricky," admitted Carolyn Topak, marketing director of Smithsonian magazine, the official publication of Washington, DC's Smithsonian Institution. "You have to make sure that you are in compliance without risking lowering your response rate, because obviously your response rate is critical."
Publishers also can change their pitch from a "free issue" to a "free trial," according to Hadlock. Advertising guidelines from the Federal Trade Commission say that the word "free" should not be used if the product or service is not an unconditional gift and if all the conditions required for its receipt are not clearly and conspicuously set forth. While a magazine issue likely would be considered a product or service, a trial likely would not.
"The wording is intended to draw the distinction between tests, which are not goods, and copies, which are goods," he said. "It's a bit of a fuzzy distinction, but I think it's a defensible distinction."
Hadlock also warns against sending an invoice to the consumer before the actual sample issue arrives. Although that practice is common among publishers, it can irritate the consumer and undermine the offer by denying the person the free trial examination before deciding whether to retain or cancel the subscription.
Although Hadlock would not predict the outcome of the cases that have been filed, he thinks that if the publishers lose they merely would be ordered not to use misleading soft offers. It is unlikely that publishers would be ordered to return subscription money obtained through the soft offers.
"I would say the real party in interest is the lawyer," he said, "because the lawyer who brings an action on behalf of someone suing under the consumer fraud statutes can generally be awarded attorneys' fees."
Although many publishers aren't aware of the confusion that soft offers may cause, Topak, whose magazine has a rate base of 2 million readers, said word will spread quickly in light of the threats of court action.
"It's becoming more and more of an issue," she said.