FTC Has a Warning for Sellers About Product Labeling
This entry was posted on April 21, 2016.
Personal Care Products Targeted For Misrepresentation
Product labeling and packaging can be tricky. Sellers are tasked with finding ways to market their goods to appeal to their target audiences. The problem is that some of the most effective strategies can lead to legal ramifications and consumer upset. Examples of this have most recently been highlighted by companies using phrases such as "all natural" in a misleading manner.
This week the Federal Trade Commission issued a warning to businesses that sell consumer goods about not labeling products as being natural when the items contain artificial ingredients. Five makers of skin and hair products were recently charged by the agency for wrongfully promoting their cosmetics as being 100 percent natural, even though they did contain synthetic chemicals.
In the statement, the FTC Bureau of Consumer Protection Director Jessica Rich said, "Companies should take a lesson from these cases."
Four of the accused companies have decided to settle their cases and agreed to modify labels, the source noted, while the fifth is now dealing with a commission complaint charge. The sellers are now required to support any health or environmental claims made on product labels with scientific research and evidence. The FTC also explained that failing to comply with the issued consent order could lead to a penalty fee of as much as $16,000 per violation.
According to The Wall Street Journal, this is the first time the agency "has targeted the natural claims made by personal-care products" and that the number of companies making such statements on product labels has increased; some organizations will make a natural claim even if only a few ingredients contained in the item are made using botanical sources.
Dishonest Labels Could Cause Brand Damage
This event is only one of the many that have emerged across multiple industries recently. Some food companies and manufacturers of household items have come under increased scrutiny for false advertising and misrepresentation.
Regardless of the size of the business or which market it sells to, no brand is safe from critical observation or inspection. The proliferation of lawsuits related to false labeling highlights the overarching trend of consumers wanting to know exactly what ingredients are used in foods and other products.
This is why it is crucial for any seller today to enhance the level of honesty and transparency it has with its audience. Product labeling and packaging can and should be used to clearly communicate with potential customers. When designing a label, businesses must take into account what matters most to shoppers and adamantly avoid making claims solely in hopes that this will make the product more appealing to consumers.
Sellers don't have a lot of label room to work with, so it is important that every inch is used strategically. Because more people are growing skeptical of products labeled as "natural," it may not be the most effective use of space. Working with a custom print provider can help give companies access to the innovative solutions needed to enhance the design and quality of product packaging.
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