We've previously spoken about the role of marketing in business, and the various inbound and outbound marketing activities you can do to attract your audience. Now that we've established the advantages of effectively marketing your business, we want to talk about the legal issues that come with marketing.
The Australian Trade and Investment Commission (Austrade) defines your legal obligations for both national and international trade. Here are some common marketing operations and a checklist of legal matters you should remember.
1. Display prices
Clarity and transparency are the fundamentals of Australian business pricing models. You should always display your prices clearly, without any room for misunderstanding.
If you sell packaged products, like grocery items, you have to display the unit price for each product. All price displays should include taxes, levies, and optional services that the customer has chosen. For example, when you buy something on eBay and choose gift wrapping as an added service, the final price you see will include charges for the wrapper and the labour. The only exceptions to this rule are when you're selling to a business (B2B) or offering delivery, where you can charge GST and delivery separately.
If you display multiple prices for a product, you have to sell it for the lowest price unless you specify how and why the same product incurs different prices. For example, when you shop on Amazon, the product page shows multiple sellers and specifies that each seller has their own price. Prices can vary based on the state and territory as well. Communicate the reasons for price differences to your customer clearly, either on your website or on your in-store displays.
Be cautious when using the "was" and "is" pricing model. Also known as comparison advertising, it looks something like, "this item was $19.99 but you can get it now for just $12.25!" This can mislead customers, especially if you didn't sell your product at the previous price for a reasonable period. That implies that you're trying to get rid of the product. If you do have to clear stock, then it's best to comply with transparency laws by indicating them as "clearance." Comparison pricing could be misleading in other cases as well, such as when:
The wholesale price and selling price have smaller margins during a sale period than normal selling period
You match your competitors' prices, but they are from different markets or geographical locations
You suggest "savings" on the Recommended Retail Price (RRP), but you've been selling your product at a higher or lower price than the RRP.
Many businesses, namely restaurants, bars, and any in the hospitality industry, often impose surcharges on weekends or holidays. If you run such a business where you indicate prices for your goods and services, you must also clearly declare what surcharges apply and when. For instance, if you run a restaurant, your menu should legibly state that you charge a 10% surcharge on Sundays and holidays.
Similarly, if you impose surcharges for credit and debit card payments, you must display a sign in your business area informing customers. According to the Competition and Consumer Amendment (Payment Surcharges) Act of 2016, your surcharge can't be more than what it costs you to process electronic payments. Charging more than that threshold will land you with court charges and fines.
As part of your outbound marketing activities, you might run contests or promotions to generate leads. However, all competitions are regulated by state and territory governments, and you should acquire a legal permit from ABLIS.
A traditional and effective outbound marketing activity, telemarketing involves phoning potential customers to try and convince them to buy your products or services. Before you start dialling, though, see that you don't contact anyone listed on the Do Not Call Register.
Most marketing activities are regulated by state and/or federal laws, and you must also comply with the privacy act and spam regulations. These regulations also apply to email marketing activities—you must respect customers who prefer to opt-out of your campaigns.
Signs, brochures, and spruiking
Outdoor advertising, like handing out brochures, selling to passersby through a megaphone or music, and posting bills and signs (including both temporary sign boards and longer-term signs on buildings and public property), are all monitored by your state or territory government. You may need a permit before you conduct any of these activities, and you can download the form through the ABLIS website.
Exporting and international marketing
Australia follows the United Nations Security Council sanctions for rules on exporting to certain countries.
If you sell internationally, you need to factor in additional marketing costs. These include expenses like research and travel, overseas communications, packing, labelling, localising text, insurance, complying with foreign standards, and promotional costs. Collectively, these are your fixed costs. Your total export costs will be fixed costs + shipping costs, duties, warehouse fees, air or freight insurance, and other trade regulation expenses.
The export industry is a known breeding ground for scams. It's important that you protect yourself and avoid any inadvertently fraudulent practices during your exporting, marketing, and distribution cycles.
Protect your business
• Intellectual property
When you register to protect your IP in Australia, you're only protected within the country. If you export goods, you also need to apply for international protection. For patents, apply within 12 months of starting your export operations. For trade marks and signs, apply within six months. You can do both through IP Australia.
• Money scams
It's common for scammers to pretend to be influential people and contact businesses offering marketing and sales services. They may ask for bank and passport details or confidential business documentation, or they may even try to convince you to transfer payments in advance. Be wary of these incidents because if you use tools like Western Union and MoneyGram, it's often impossible to trace wire transfers back to the person who scammed you.
You can report them to Scamwatch, a public entity managed by the Australian Competition and Consumer Commission.
Comply with regulations
• Be wary of bribery
Bribing is illegal, even if it's commonplace in the country you're exporting to. This applies throughout your supply and marketing chains. If you are found guilty, even if you are overseas at the time, you and your business may incur heavy fines in Australia according to local laws. Read more about what Austrade is doing to prevent bribery in the export business.
• Vet the organisations that you deal with
The Department of Foreign Affairs and Trade maintains a consolidated list of people and groups who are banned for violence and terrorism. Additionally, the Australian National Security also has a list of terrorist organisations that pose a national and global threat. Dealing with these organisations in any way is illegal and will incur legal action. Illegal actions include but are not limited to:
Using any material or property owned by known terror groups and individuals, such as warehouses, halls, and meeting spaces.
Offering and lending assets to those groups and individuals, such as by allowing them to beta test your products or give reviews and testimonials.
Austrade outlines a series of other activities that may incur severe legal penalties.
• Keep your supply and marketing chains ethical
Forced labour, human trafficking, and child labour are all serious violations of human rights and resources. Ensure that your supply and marketing processes are free from these practices. Any agencies, subsidiaries, and contracted third parties you hire should compensate their staff fairly, whether they're handing out flyers in the street or managing your online brand.
If you're an Australian business earning $100 million or more, you're required by law (Commonwealth Modern Slavery Act 2018) to report unfair treatment under the Modern Slavery Reporting Requirement scheme. It's a national initiative and any business can be voluntarily involved. Learn more about the scheme on the modern slavery register.
As in many cases, you might have to discuss your marketing plans and campaigns with your legal advisor before you set out to do anything—especially if you are selling internationally. However, we hope this blog gives you an overview of what to expect when setting up your marketing and business strategies. If you have any other topics you'd like us to cover, let us know in the comments!