Sales promotion is a type of marketing typically directed at the consumer or distributor of a product. The Federal Trade Commission (FTC) holds the authority to regulate sales promotion law and evaluate pricing practices to protect consumers from deceptive promotions.
Sales promotions geared to consumers are also known as consumer sales promotion. Trade sales promotions target distributors--retailers and wholesalers--of a product, usually in the form of incentives to sell the product. Typical sales promotions include techniques like discounts or sales, distribution of coupons or samples, sweepstakes or contests, rebates or premiums and special store displays known as point-of-purchase displays.
Sales promotions are the inevitable outcome of intense competition between businesses, and unfortunately can lead to abusive and deceptive marketing practices on the part of some companies. Sales promotion law became necessary to protect consumers from fraud and predatory marketing techniques.
Congress passed the Telemarketing and Consumer Fraud and Abuse Prevention Act in 1993. The Federal Trade Commission Act prohibits the dissemination of false advertising. Another sales promotion law found within the Federal Trade Commission Act deals with rules governing the contents of warranties and the requirement of conspicuous disclosure to consumers including accurate and understandable information.
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