ICC International Code of Sales Promotion
Commission on Marketing and Advertising, May 2002

French version

Introduction

This edition of the ICC International Code of Sales Promotion follows the well-established policy of ICC of promoting high standards of ethics in marketing via self-regulatory codes intended to complement the existing framework of national and international law.

This Code, which was first issued in 1973 and then revised in 1986, is an expression of the business community recognition of its social responsibilities in respect of commercial activities and communications.

This edition combines past experience with current thinking based on the concept of sales promotion as a useful means of competition, necessary in the market economy. In the view of ICC, the Code establishes a fair balance between the interests of all parties concerned - producers, distributors and consumers. ICC considers it to be fundamental and in the interest of society as a whole that business, while observing the principles of fair competition, should be free to choose between different marketing methods.

The Code is designed primarily as an instrument for self-regulation but is also intended for use by legal or administrative bodies as a reference document within the framework of applicable laws.

ICC believes that this new edition of the Code will promote adherence to high standards of sales promotion practice. Being a pointer to the direction of further international harmonization, it will facilitate the free flow of products across frontiers leading to efficient markets and significant consumer benefits.

Scope of the Code

The Code applies to marketing devices and techniques that are used to make goods and services more attractive by providing some additional benefit whether in cash or in kind, or the expectation of such a benefit. The Code applies, irrespective of form of distribution and of media, including electronic and audio-visual media. The Code also applies to sales and trade incentive promotions, to editorial promotional offers and to those made by audio-visual media.

Promotions are temporary activities, but the Code applies also to the long-term and permanent use of promotional techniques.

Amongst others, the Code covers such forms of promotion as:

• premium offers of all kinds;
• reduced price and free offers;
• the distribution of stamps, coupons, vouchers and samples;
• charity-linked promotions;
• prize promotions of all types including incentive programmes.

The Code should be read in conjunction with the other ICC Codes, namely the:

• ICC International Code of Advertising Practice
• ICC International Code on Environmental Advertising
• ICC International Code of Direct Marketing
• ICC International Code on Sponsorship
• ICC/ESOMAR International Code of Marketing and Social Research Practice
• ICC Revised Guidelines on Advertising and Marketing on the Internet
• ICC International Code of Direct Selling.

The Code sets standards of ethical conduct as part of the system of self-regulation in marketing and thereby complements existing legal regulations in the country or countries concerned.

Interpretation

The Code is to be applied in the spirit as well as in the letter, bearing in mind the varying degrees of knowledge, experience and discriminatory ability of those to whom promotions are directed.

Definitions

Depending on the circumstances of the promotion, any producer, wholesaler, retailer or other person in the marketing process may be promoter, intermediary and/or beneficiary.

In this Code:

• the term "promoter" refers to any person, company or organization by whom or on whose behalf a promotion is initiated;
• the term "intermediary" refers to any person, company or organization, other than the promoter, furthering the implementati on of any form of sales promotion;
• the term "beneficiary" refers to any person, company or organization to whom any sales promotion is directed, whether as an ultimate consumer or as a professional or trade customer;
• the term "main product" refers to the good or service (or combination thereof) which is being promoted;
• the term "additional benefit" refers to any good, service (or combination thereof) which is offered for a promotional purpose;
• the term "competition" refers to any skill contest or prize draw used in conjunction with a sales promotion activity.

Basic Principles

Article 1
All sales promotions should be legal, decent, honest and truthful. They should be conceived with a due sense of social responsibility and should conform to the principle of fair competition as generally accepted in business:

• all sales promotions should deal fairly and honourably with consumers and other beneficiaries;
• all sales promotions should be so designed and conducted as to avoid causing justifiable disappointment or giving any other grounds for reasonable complaint;
• the administration of promotions and the fulfilment of any obligation arising therefrom should be prompt and efficient;
• the terms and conduct of all promotions should be equitable to all participants;
• all sales promotions should be framed in a way which is fair to competitors and other traders in the market;
• neither the design nor the implementation of a promotion should be such as to provoke, or to appear to condone, violent or otherwise illegal or anti-social behaviour, or to encourage practices contrary to the public interest;
• no promoters, intermediaries or others involved should bring sales promotion into disrepute.

General Rules

Integrity
Article 2
Sales promotions should be so framed as not to abuse the trust of the beneficiaries or intermediaries or to exploit their possible lack of experience or knowledge.

Any factor likely to affect the decision whether or not to participate in a promotion should be communicated in such a way and at such a time that the beneficiary can take it into account before being committed to any purchase which may be necessary for participation.

Terms of the offer
Article 3
Sales promotions should be so devised as to make it easy for the beneficiary to identify clearly the terms of the offer. Care should be taken not to exaggerate the value of the additional benefit and the price of the main product should not be concealed by the promotional activity.

Presentation
Article 4
The presentation of a promotion should not be likely to mislead those to whom it is addressed. Neither the value nor the nature of the promotion should be misrepresented. Any advertisements, including any advertising devices used at the point of sale, should be framed in strict accordance with the ICC International Code of Advertising Practice.

Servicing of promotions
Article 5
Sales promotions should be administered with adequate resources and supervision, including all possible precautions to ensure that the servicing of the offer meets the beneficiaries' reasonable expectations.

In particular, the promoter should make sure:

• that the availability of the additional benefits is adequate to allow demand to be honoured within a reasonably short term. If delay is inevitable beneficiaries should be so advised and necessary steps be taken to adjust the advertising of the offer;
• that faulty goods or inadequate services will be replaced or that appropriate financial compensation will be given. Costs incurred as a direct result of such inadequacy will be refunded immediately, on request;
• that complaints are efficiently and properly handled.

Protection of privacy
Article 6
Sales promotions should respect the right of privacy of any individual member of the public and any trader and should not impose on them any undue trouble or annoyance.

Where data is collected about individuals as a result of a sales promotion, applicable requirements of data protection should be followed, and in particular the terms of the ICC International Code of Direct Marketing should be observed.

Safety
Article 7
Sales promotions should be designed and conducted with proper regard to appropriate standards of safety. Additional benefits should be such that intermediaries, beneficiaries or any other persons are not exposed to any harm, when properly used.

If appropriate, instructions for use should include safety warnings.

Children and young people
Article 8
Sales promotions addressed to children and young people should not exploit their credulity or inexperience. No sales promotion should be undertaken which is likely to harm children or young people mentally , morally or physically, or to strain their sense of loyalty vis-à-vis their parents or guardians.

Specific Rules

Presentation to beneficiaries
Article 9
The presentation of sales promotions should allow participants, before making any required purchase, to be informed of any conditions likely to affect their decision to purchase the relevant product.

In particular, the presentation should include, where applicable:

• clear instructions on the method of making use of, or obtaining, the promotional offer, e.g. conditions for obtaining free gifts or premiums, or for taking part in competitions ;
• main characteristics of the additional benefits offered;
• any time-limit for taking advantage of the promotional offer;
• any limitation as to the geographical area or age, quantity of promotional items or other additional benefits available, or any other limitations on quantity. In the case of a limitation on quantity, the beneficiary should be properly informed of any arrangements for substituting alternative items or refunding money;
• the value of any voucher or stamp offered where a monetary alternative is available;
• expenditure involved, including costs of shipping, handling and the terms of payment;
• the full name and address of the promoter and an address to which complaints can be directed if different from the address of the promoter.

Article 10
Where the sales promotion includes a competition, in addition to the information required by Article 9 above, the following information should be given or at least be made available on request, and unconditional on purchase of the main product, prior to participation:

• rules governing eligibility to participate in the competition;
• any costs associated with participation other than for communication at or below standard rate (mail, telephone etc.);
• the number, value and nature of prizes to be awarded and whether a cash alternative may be substituted for a prize;
• in the case of a skill contest, the nature of the contest and the criteria for judging the entries;
• the selection procedure for the award of prizes;
• closing date of the competition;
• when and how the results will be available;
• whether the beneficiary may be liable to pay tax as a result of winning a prize;
• the time period during which prizes may be collected;
• where a jury is composed, the composition of the jury;
• any intention to use winners or winning contribution in post-event activities.

Use of the term "free"
Article 11
The term "free", e.g. free gift or free offer, should only be used:

• where there is no obligation associated with the offer;
• where the beneficiary is required to pay just for shipping and handling by an amount not exceeding the cost incurred by the promoter, or
• in conjunction with an obligation, e.g. to purchase, if the price of the main product has not been increased to cover all or part of the cost of the offer.

Presentation to intermediaries
Article 12
Sales promotions should be so presented to intermediaries that they are able to evaluate the services and commitments required of them. In particular, the promoter should give adequate details as to:

• the organization and scope of the promotion including the timing and any time-limit;
• the ways in which the promotion will be presented to the trade and to the public;
• the conditions for participation;
• the financial implications for intermediaries;
• any special administrative task required of intermediaries.

Article 13
The outer packing of goods bearing promotional offers should be clearly identified and should state any closing date or time-limit so that the intermediary is able to effect the necessary stock control.

Particular obligations of promoters
Article 14
Sales promotions should be devised and handled with due regard to the legitimate interests of intermediaries and should respect their freedom of decision.

Article 15
The terms of sales promotions should be so designed as to respect the bond of loyalty between employees and their employers.

Promotion and incentive schemes should be designed and implemented to take account of the interests of everyone involved and should not conflict with the duty of employees to their employer or their obligation to give honest advice to consumers.

Article 16
The promoter should always obtain the prior agreement of the intermediary or his/her responsible manager if he/she, inter alia, wishes to:

• invite the employees of the intermediary to assist in any sales promotion;
• offer any inducement or any reward, financial or otherwise, to such employees for their assistance or for any sales achievements in connection with any sales promotion.

In the case of an offer addressed openly through public media, for which such prior permission cannot be obtained, it should be clear that employees must obtain their employer's permission before participating.

Article 17
All goods, including additional benefits and other relevant material, should be delivered to the intermediary within a period which is reasonable in terms of any time limitation on the promotional offer.

Article 18
Sales promotions involving active co-operation by the intermediary or his/her employees should be so devised as not to prejudice any contractual relationship which may exist between the intermediary and the beneficiaries.

Particular obligations of intermediaries
Article 19
Sales promotions which have been accepted by the intermediary should be fairly and honestly handled, and properly administered by him/her and his/her employees.

Article 20
Sales promotions involving any specific responsibility on the part of the intermediary should be so handled by him/her that no misinterpretation is likely to arise as to the terms, value, limitations or availability of the offer.

In particular, the intermediary should adhere to the plan and conditions of the promotion as laid down by the promoter. No changes of the agreed arrangements, e.g. alteration to the time-limit, should be made by the intermediary without the prior agreement of the promoter.

Comparisons
Article 21
Sales promotions involving comparisons should be so designed that the comparison is not likely to mislead, and should comply with the principles of fair competition and with the protection of trade marks.

Points of comparison should be based on facts which can be substantiated and should not be unfairly selected.

Responsibility
Article 22

22.1 All sales promotions should conform to this Code. The onus for observing the Code falls on the promoter, who has the ultimate responsibility for all aspects of sales promotions, whatever their kind or content.

22.2 Anyone taking part in the planning, creation or execution of any sales promotion has a degree of responsibility commensurate with his/her position for ensuring the obser vance of the Code towards intermediaries, beneficiaries, and other parties affected or likely to be affected by the promotion.

Substantiation
Article 23
Substantiation of verifiable facts needed to establish compliance of the sales promotion with the Code should be available and be produced when called for by any relevant self-regulatory body.

Respect of self-regulatory decisions
Article 24
No promoter, intermediary or others involved should be party to the implementation of any sales promotion which they know to have been found unacceptable by the relevant self-regulatory body.

Implementation and interpretation
Article 25
This Code is to be applied nationally and internationally, and should be the basis for the decisions by bodies set up for the purpose of self-regulation.

Any request for interpretation of the principles contained in this Code should be submitted to the ICC Code Interpretation Panel(1).

Document n° 240-46/237 Rev. 3
May 2002

FOOTNOTE
(1) See the Terms of Reference of the ICC Code Interpretation Panel - www.iccwbo.org