What a Money-Back Guarantee Has to Do

Answer first: the words carry a defined promise

The federal guides on advertising warranties and guarantees name three phrases and attach one condition to all of them.

A seller should use the terms Satisfaction Guarantee, Money Back Guarantee, Free Trial Offer, or similar representations in advertising only if it refunds the full purchase price of the advertised product at the purchaser's request.

Full purchase price, at the purchaser's request. That is the whole standard, and it is stricter than most shoppers assume.

A second rule sits beside it. An advertisement mentioning such a guarantee should disclose any material limitations or conditions that apply, with clarity and prominence enough to be noticed and understood.

What these guides cover, and the one part that is narrower

The scope paragraph is doing two jobs at once, and reading only half of it gets the answer wrong in either direction.

One section deals with disclosing where to see the written terms before you buy. It applies only to advertisements for written warranties on consumer products, as the Magnuson-Moss Warranty Act defines those terms.

The very next sentence widens everything else. The other sections of the guides apply to the advertising of any warranty or guarantee.

So the satisfaction-guarantee rule, the rule about lifetime wording, and the rule about actually performing are not limited to physical goods by their own terms.

The scope paragraph also keeps a residual door open. It says the Commission may act against an advertiser who misrepresents the product or service offered. The same sentence covers misrepresenting the terms or conditions of the warranty, and employing other deceptive or unfair means.

Why the narrower section is narrower

The two definitions that draw that boundary are worth having, because they explain a lot of vocabulary in this market.

A consumer product means any tangible personal property which is distributed in commerce and which is normally used for personal, family or household purposes.

A written warranty has a two-branch definition. The first branch covers a written affirmation of fact or written promise made in connection with the sale of a consumer product. It has to relate to the nature of the material or workmanship, and affirm that it is defect free or will meet a specified level of performance over a specified period.

The second branch covers any written undertaking to refund, repair, replace or take other remedial action if the product fails to meet the specifications set out in that undertaking.

A telehealth program sells a mixture of things. A vial is tangible personal property; a consultation, a membership and a coaching program are not.

That is why the pre-sale-availability section has a limited reach here, while the sections on how a guarantee may be advertised do not carve services out at all.

The conditions belong in the advertisement

The guides illustrate their disclosure rule with two examples, and both put the condition in the same breath as the promise.

One covers a guarantee conditioned on returning the unused portion within a set number of days, and the sample wording states that condition immediately after the guarantee.

The other covers a guarantee conditioned on returning the product in its original packaging, and again the condition sits inside the claim.

Neither example sends the reader to a footnote. Both are written as one sentence that a person could act on without leaving the page.

The test the guides apply is whether the disclosure has clarity and prominence enough to be noticed and understood by prospective purchasers.

Applied here, a guarantee conditioned on a weight threshold, on completing a program, on unopened medication, or on a minimum number of paid months is a material condition by any reading.

The mail and telephone order rule, which is where online sits closest

The narrower section has a second half aimed at buying without standing in a shop.

The rule covers an advertisement in a catalog, or in any other solicitation for mail order or telephone order sales. Where such an advertisement mentions a warranty or guarantee on the product, it should disclose how to obtain the complete details.

The disclosure is that a prospective purchaser can get the complete written terms free from the seller on specific written request, or from the catalog itself.

Its sample wordings are plain. Write to us for a free copy of our full warranty, at an address the advertisement gives.

The principle underneath is portable even where the section is not. If a promise is advertised, the full text of the promise should be obtainable before you buy rather than after.

Lifetime, and other words that need a referent

A short section deals with duration words, and it is useful anywhere a program advertises an open-ended commitment.

If an advertisement uses lifetime, life, or similar wording to describe how long a warranty or guarantee lasts, it should disclose the life to which the representation refers.

The guides' own examples are about vehicle parts, where the life in question might be the life of the car or the period the original purchaser owns it.

The transferable point is that a duration word is meaningless until you know whose life, or what life, it is counting.

In a subscription health program the same question has an obvious form. A promise that lasts as long as you are a member ends when the membership does.

Advertise it only if you honor it

The last section of the guides is one sentence and it closes the loop.

A seller should advertise that a product is warranted or guaranteed only if it promptly and fully performs its obligations under that warranty or guarantee.

That converts a pattern of slow or partial payment into a problem with the advertisement rather than only with the account.

It also gives a reader a reason to look for evidence of performance rather than evidence of the promise. The promise is on the sales page; the performance shows up in complaints, disputes and public actions.

What these guides do not decide

They are guides, which is a defined thing. Industry guides are administrative interpretations of laws administered by the Commission, and failure to comply may result in corrective action under applicable statutory provisions.

They do not create a private right of action, and nothing here is advice about any particular contract.

They also do not decide what your own agreement says. A refund clause has its own trigger date and its own exclusions, and those govern the transaction.

And they do not reach the separate question of what happens to money once a prescription has been dispensed, which is a different body of rules.

Reading a guarantee before you pay

Start with the noun. Ask what is guaranteed: a result, satisfaction, a refund, or a credit toward another month. Those are four different promises and marketing uses one word for all of them.

Then ask what gets returned. The guides' standard for those three phrases is the full purchase price, so anything less is a limitation the advertisement should be disclosing.

Then find the conditions and count them. A threshold, a completion requirement, a return window and a minimum term are each material.

Then look for the full text before you buy. A promise you can only read after paying is not a promise you can compare.

Finally, separate the guarantee from the cancellation. Stopping the billing and getting money back are different acts, on different clocks, and doing one does not accomplish the other.