When does a promotional 'free gift' violate FTC rules and how are those complaints handled?

1. What the FTC’s “Free” guide actually requires

The FTC’s Guide Concerning Use of the Word “Free” requires that all material terms governing receipt and retention of a “free” item be disclosed clearly and conspicuously at the outset of the offer so there is no reasonable probability of misunderstanding, and it treats synonyms like “gift,” “bonus,” or “given without charge” the same as “free” to prevent circumvention ^{[1] [3]}.

2. Common ways a “free” offer becomes deceptive

A “free” promotion is deceptive when the advertiser recoups costs through hidden charges (for example, inflated shipping or mandatory fees), substitutes an inferior product for the advertised free item, conditions the gift on undisclosed extra purchases, or advertises availability that doesn’t exist in the consumer’s market — the guides explicitly warn against those tactics and against disguising “free” with similar language ^{[2] [4] [3]}.

3. Rules about availability, roll‑outs and market share limits

The Free Guides mandate that a business not use “free” as a lure when the offer won’t be passed on to consumers in the advertised market — for example, a supplier’s promoted “free” product should not make up more than 50% of the offeror’s sales of that size in the area during the promotion period, and suppliers must disclose geographic or reseller limitations to avoid misleading broad advertising ^{[3] [5]}.

4. Influencers, gifted items, and disclosure obligations

When a gifted product underlies an endorsement, the FTC treats the gift as a material connection: creators and brands must make clear, conspicuous disclosures that a post is sponsored or that items were provided free, because failing to disclose converts an otherwise ordinary recommendation into a potentially deceptive endorsement under the Endorsement Guides ^{[6] [7] [8]}.

5. Intersection with deceptive‑pricing and fee rules

Free‑offer guidance sits alongside the FTC’s Deceptive Pricing Guides and the Rule on Unfair or Deceptive Fees: advertisers must not misrepresent regular or comparative prices used to justify a free item and must display total prices accurately until the consumer meets the promotion’s conditions; novel enforcement has targeted tactics that hide the true cost of the purchase surrounding the “free” item ^{[4] [9]}.

6. How complaints are handled and enforcement tools

Consumers or competitors can report deceptive “free” offers to the FTC’s complaint portal or the Bureau of Consumer Protection; the FTC investigates, and if it finds a violation it can pursue civil remedies including injunctions, monetary relief, and negotiated settlements or file administrative or district‑court actions — the agency’s guides are not statutory law but form the benchmark the Commission uses to assess deception under Section 5 ^{[10] [2]}.

7. Responsibilities upstream and practical consequences for advertisers

Suppliers and resellers are warned that if they know a “free” offer is not being passed on or is used to deceive, they must stop the deception or withdraw the offer; failure to remedy can lead to enforcement and reputational damage, and the FTC has pursued companies and influencers for failing to comply with the disclosure and “free” guidance ^{[5] [11]}.

8. What the reporting does not settle and where to look next

The available sources describe the FTC’s standards, examples, and enforcement posture but do not catalog every recent enforcement action or quantify how often complaints lead to lawsuits versus settlements; readers seeking case histories or monetary penalties should consult FTC press releases and case dockets for specifics beyond the guides and explanatory materials cited here ^{[1] [2]}.