Unlimited Guarantee? Was Ist Das?

  • Share
  • Read Later
Newsflash for linguists: Apparently, there is no German translation for "unlimited guarantee." And if you’re a foreign company that happens to forget this little rule of commerce, or offer your customers a little promotional gift, a consortium of 1,600 German businesses will be happy to take you to court to keep you in line. The latest defendant in the German war against "unfair competition" is Wisconsin-based clothier Lands’ End. The charge? That Lands’ End’s unlimited money-back guarantee — inviting consumers to return any of the company’s products, at any time, for any reason — is illegal under German laws purported to protect consumers from companies that distort their prices with offers of freebies. In this case, says TIME Berlin correspondent Charles Wallace, "an unlimited guarantee is a gift of something of value unconnected to the product. This sort of ‘giveaway’ is outlawed in Germany because the government claims it clouds price transparency. If you buy a magazine subscription and you get a free calculator, how much are you paying for the actual subscription?"

Lands’ End lost its case, and it's far from being alone. Each year, more than 20,000 foreign companies are taken to court under this law, which strictly regulates sales or special promotions by marketers, as well as "gifts" to consumers. Is this simply an inferiority complex masquerading as a lawsuit? According to Wallace, the continuing flood of lawsuits is partly due to a case of nerves within the German business community. "Here are 1,600 German companies, scanning the horizon, looking for anything that might threaten their business and profits — and when they see something, they make a move to head off that potential threat." All this paranoia seems unreasonable to most U.S. consumers, to whom comparison shopping — and the freebies that come with it, like frequent flier miles — are taken for granted. While the German businesses’ aggressive stance has been upheld consistently by the country’s highest courts, some companies, like American Express, have taken their appeals to the European Commission. If the E.C. doesn't grant German consumers a little taste of a free market, watch for price-conscious Germans to find their economic freedom in the relatively unregulated world of e-commerce, where promotions abound and consumers call the shots.