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Your Business Email Marketing Campaign Could COST YOU $40,654.00!!!

Posted by Craig M. Morgan | Jul 26, 2018 | 0 Comments

What rules govern commercial emails? & How to protect against costly mistakes.

You have started your vegetarian restaurant food delivery business called Vegabite, LLC (Vegabite) several months ago and it is progressing to the point where you have a good size customer base. You want to advertise your upcoming discount for the holiday season to entice people to use your service through their email addresses.  Maybe it's to refer a friend now and get 10% off the next order between Thanksgiving and Christmas or you are raising money to feed the homeless this holiday season and will donate 10% of each order. You realize that there are some rules on how you should communicate to your customers, but you are not sure where to start and you don't want to get fined. 

The CAN-SPAM Act is a law that sets the rules for commercial email, establishes requirements for commercial messages, gives recipients the right to stop emails, and spells out tough penalties for violations.  Despite its name, the CAN-SPAM Act does not apply just to bulk email. It covers all commercial messages, which the law defines as “any electronic mail message the primary purpose of which is the commercial advertisement or promotion of a commercial product or service,” including email that promotes content on commercial websites. Each separate email in violation of the CAN-SPAM Act is subject to penalties of up to $40,654.00, so non-compliance can be costly.

As the business owner, you need to consider how to make sure that the message is clearly identified as an advertisement from Vegabite and the subject line reflects the content of the message. Vegabite's email address should be used in the email being sent to your customers and your customers should be able to respond to the same email address. You should also consider including Vegabite's complete and valid physical postal address even though it is an online business. Other things to think about are how you are going to explain to Vegabite's customers that they can opt-out of getting emails from Vegabite in the future and whether to include a survey as to why the customer wanted to opt out of the emails from Vegabite.

Vegabite would be subject to fines unless it complies with the CAN-SPAM Act by honoring a recipient's opt-out request within ten (10) business days of the receipt of the request. Additionally, Vegabite cannot charge a fee, require the recipient to give any personally identifying information beyond an email address, or make the customer take any step other than sending a reply email or visiting a single page on an Internet website as a condition for honoring an opt-out request. Once Vegabite is aware of a customer opting-out, Vegabite cannot sell or transfer the email address, even in the form of a mailing list.

Given the tremendous risk of penalties, it is recommended that you have a marketing law attorney strategize on your email marketing campaign. As a marketing law attorney, I would advise – at a minimum – reviewing Vegabite's email and any emails sent on Vegabite's behalf by other marketing companies to make sure these rules are complied with. 

Contact Providence Law for more information about marketing law. 

Providencelawcarolina.com704.412.9450

On Location in Charlotte and Lake Norman

Providence Law serves clients throughout NC.

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About the Author

Craig M. Morgan

Craig Morgan's practice areas include business and corporate law, franchise law and general corporate counsel. He has represented a variety of businesses including franchise businesses and independent, privately held companies. Craig has represented clients in negotiations and ...

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