Hawaii Administrative Rules › Title 16 - DEPARTMENT OF COMMERCE AND CONSUMER AFFAIRS › Chapter 303 - UNFAIR OR DECEPTIVE PRACTICES IN ADVERTISING › Section 16-303-5 - Use of the word "free"

Current through June, 2024
(a) It shall be an
			 unfair or deceptive act or practice for any seller to advertise "free"
			 merchandise in connection with the sale of other merchandise except in
			 conformity with this section. When the consumer is told that merchandise is
			 "free" if other merchandise is purchased, the word "free" indicates that the
			 consumer is paying nothing for the "free" merchandise and no more than the
			 regular price for the other merchandise. A consumer has a right to believe that
			 the seller will not directly and immediately recover, in whole or in part, the
			 cost of the "free" merchandise by marking up the price of the merchandise that
			 must be purchased, by substituting inferior merchandise, or by other means. It
			 is the express intent of this section to prohibit the practice of advertising
			 or offering merchandise as "free," when in fact, the cost of the "free"
			 merchandise is passed on to the consumer, in whole or in part, by raising the
			 price of the merchandise that must be purchased in connection with the "free"
			 merchandise or by decreasing the quality or quantity of merchandise that must
			 be purchased in connection with the "free" merchandise.
(b) "Free," as used in this section, includes
			 the use of such words or phrases as "bonus," "gift," "free-of-charge," "prize,"
			 "absolutely without charge," "buy one, get one free," "two-for-one-sale," "1
			 cent sale," "50% off with purchase of two," and words of similar import or
			 meaning, which would reasonably lead a person to believe that the person may
			 receive something of value, entirely or in part, without the requirement of
			 additional compensation. "Free," as used in this section, does not include a
			 bona fide quantity discount.
(c)
			 When using the word "free" in advertisements, all the terms, conditions, and
			 obligations upon which receipt and retention of the "free" merchandise are
			 contingent shall be set forth clearly and conspicuously. In the case of oral
			 statements or representations, such terms, conditions, and obligations shall be
			 stated orally at the outset of the offer of "free" merchandise. In the case of
			 written statements or representations, such terms, conditions, and obligations
			 shall appear next to the offer of "free" merchandise. Disclosure of the terms
			 of the offer set forth in a footnote of an advertisement to which reference is
			 made by an asterisk or other symbol placed next to the offer shall not
			 constitute adequate disclosure. A notice of the existence of an offer of "free"
			 merchandise on packaged merchandise shall not be regulated by this section
			 provided that the notice is not otherwise unfair or deceptive.
(d) It shall be an unfair or deceptive act or
			 practice for any seller to offer "free" merchandise when the price of other
			 merchandise required to be purchased exceeds the seller's regular
			 price.
(e) No offer of "free"
			 merchandise shall be made in connection with the introduction of new
			 merchandise offered to be sold at a specified price unless:
(1) The offerer will discontinue the offer
			 within ninety days after the offer is first stated or specifies the duration of
			 the offer and will discontinue the offer at the specified date which date shall
			 in no event be more than six months after the offer is first stated;
(2) The offerer will commence selling the
			 merchandise promoted, separately, at a price no less than the price at which it
			 was promoted with the "free" merchandise; and
(3) The offerer will continue to sell the
			 merchandise for a reasonable period of time after the termination of the offer
			 at a price no less than the price at which it was promoted with the "free"
			 merchandise, unless compliance becomes impossible because of circumstances
			 beyond the seller's control.