The Federal Trade Commission (FTC) is distributing refunds totaling over $527,000 to consumers who purchased Nature’s Bounty and Sundown vitamins and supplements sold by The Bountiful Company (“Bountiful”) on Amazon.com after finding that the products were deceptively marketed in violation of the FTC Act.
In The Matter of The Bountiful Company
Based in New York, Bountiful manufactures vitamins and nutritional supplements and markets them under the Nature’s Bounty and Sundown brands. According to the FTC’s February 2023 complaint, in the wake of slumping sales during the Covid-19 pandemic, Bountiful took advantage of an Amazon feature that allows vendors to create “variation” relationships between similar products sold on the site that differ from each other in narrow and specific ways – such as color, size, quantity, or flavor.
The Variations The Bountiful Company Used
Products that are tagged with a variation relationship share the same product detail page on Amazon and listed as alternatives to better enable shoppers to compare and choose among variations of what is basically the same product. As most Amazon shoppers know, when they select a product on the site they are taken to a product detail page that lists variations of the selected product. For example, a product detail page for a particular item of clothing might list multiple variations of that same item in different colors. The page also displays the total number of ratings, the average star rating, and the reviews for all of the products in the variation relationship. They also share any “#1 Best Seller” or “Amazon’s Choice” badges, even though those badges only pertain to a particular product, and not all of the ones listed as variations of each other.
According to the FTC, in 2020 and 2021, The Bountiful Company deliberately created numerous variational relationships between its newly launched products (which had no star reviews or badges and were selling poorly) and its established products (which were highly rated and displayed the “Best Seller” and “Amazon’s Choice” badges), even though the products had completely different formulations and were therefore not variations of each other.
Numerous consumers purchased the newly launched products after being fooled into believing they were variations of the product they initially viewed.
The FTC v. The Bountiful Company Lawsuit
The FTC’s Complaint alleges that the strategy employed by The Bountiful Company effectively “hijacked” one product’s reviews and ratings in favor of another, to the detriment of consumers. According to the FTC’s allegations, The Bountiful Company deliberately manipulated product ratings and reviews, artificially inflating them to create the impression of popularity and quality and used badges such as "#1 Best Seller" and "Amazon’s Choice" to further deceive consumers.
This enforcement action marks the first time the FTC has challenged this type of practice, and it concluded with a success, as The Bountiful Company elected to settle the charges rather than fight them out in court.
Under the terms of the settlement, the company is prohibited from misrepresenting product or service ratings, reviews, badges, or endorsements, or otherwise unfairly manipulating online shopping platforms. The Bountiful Company also agreed to a $600,000 payment, which was deposited into a fund that will now be used by the FTC to issue refund checks to 32,689 consumers, who are urged to cash their checks within 90 days of receipt.
An Easy Lesson
An innovative marketing strategy is a valuable commodity for a company executive to have, but it can wind up being counterproductive if it violates marketing regulations. Schemes such as the one hatched by The Bountiful Company’s marketing department should have been run past the company’s legal department, which would have probably nixed it for its potential to violate the FTC Act.
For those companies that lack an internal legal department, a Blacklist Alliance subscription includes access to the Blacklist Academy, an online compliance training platform that offers marketing compliance courses that might have given the marketing team at The Bountiful Company second thoughts.
