JCK Show: Truthful online advertising

The same ethical guidelines and laws that retailers must adhere to in print and broadcast advertising also apply on the Internet.

That was the message Ron Graham had for attendees of a seminar titled “Jewelry Advertising Online: Truth . or Consequences” Thursday at the JCK Show.

Graham is national director of the Better Business Bureau (BBB) Jewelry Advertising Review Program (JARP). The organization monitors advertising in the jewelry industry to ensure that claims made in ads meet ethical and legal standards.

Graham said that most online advertising issues fall into four categories: savings claims (truth in pricing), wholesale claims, lowest price claims, and watch warranty and dealer issues. The first three items are similar to the issues regarding all advertising; the watch issue is unique to the Internet, Graham said.

Regarding the savings claim, Graham said that JARP examines three types of advertising: percent-off claims, formerly offered price claims, and manufacturers list price references.

“Everyone wants a better price,” Graham said. “And the Internet is very strongly price positioned. What we’re asking is, can you show us how you back your claim? Our standards are very clear and well positioned in law and ethics.”

He noted that BBB’s main focus is to provide self-regulation for the business community so the government will not have to step in and issue laws. JARP’s job is to alert retailers to any problems with their advertising before the government discovers the problem.

When it comes to wholesale claims, the first issue is to distinguish between a wholesaler and selling at a wholesale price. “If you say you’re a wholesaler, you should be able to substantiate that you sell the majority of your stock to retailers,” he said. “Is this the price that retailers usually pay for the product?”

Some companies will use the word “wholesale” as part of their trade name, Graham said. And there are retail jewelers claiming to sell products at wholesale prices. Retailers must be able to substantiate those claims.

Retailers who guarantee “lowest price” or claim to match competitors’ pricing must be able to back those claims.

Selling watches over the Internet raises two issues: whether watches are being sold by an authorized dealer and whether the watches have had their serial numbers removed. “Removal of a serial number is equivalent to making it a used product,” Graham said. The seller is required to state that it is a second-hand watch.

And watches sold over the Internet by sellers who are not authorized dealers means that the watch manufacturer will not honor the warranty. Graham said this information must be clearly disclosed prior to the sale.

“Does the online seller of watches disclose this?” he asked. “Does that change the value of the watch?”

Graham recommended strict adherence to the “BBB Online Code of Business Practices.” They are:

* Truthful and accurate communications

* Customer-friendly pre-purchase disclosures

* Point-of-purchase practices

* Privacy and data collection

* Security

* Customer satisfaction.