Offer subject to change: What this disclaimer does and does not mean for consumers

One common disclaimer found in terms of service is that an offer is subject to change. Contrary to the popular belief that companies likely want consumers to accept, this provision does not grant a company the right to revoke their offer entirely.

Let’s consider a bank bonus offer where a bank has offered consumers a monetary incentive in exchange for opening a new account and depositing $100,000. Of course, that number is intentionally exaggerated to emphasize just how egregious it would be if the customer fulfilled the offer terms, only to have the bank cancel the promotion and refer customers to the “offer subject to change” clause. 

Some customers may perceive promotional offers primarily as rewards and as a favor that the company is doing for them. With this mindset, the customer may not fully recognize the underlying legal contract that’s formed when they accept an offer. But, when the customer agrees to open the account under the promotional terms and the bank opens the account, the bank and customer have indeed entered into a legal agreement.

This mutual agreement creates a contractual relationship, and both parties are generally obligated to fulfill their respective commitments outlined in the terms and conditions. If the bank were to later renege on the promised reward, it could be considered a breach of contract.

Furthermore, the bank’s decision to rescind the offer could be seen as an act of bad faith. This poses the risk of reputational damage and could even result in the company being sanctioned by government agencies like the Consumer Financial Protection Bureau and the Federal Trade Commission.

It’s not to say that such disclaimers are inherently bad. In fact, they serve a legitimate purpose to protect the business from fraudulent activity and also helps it fulfill its obligations to consumers who’ve already signed up for the promotion.

As an example, such a clause would allow the flexibility of the bank to modify the terms and apply them to new participants if the bank discovered loopholes that negatively impacted the bank or the fairness of the promotion.

There may also be instances where the company has an overwhelming response to an offer and doesn’t believe that its staff or the budget can accommodate the level of interest. In this case, the company could cancel the promotion to prevent more people from signing up, while still honoring the offer for people currently enrolled in the promotion.

So, while these disclaimers do serve a rightful purpose, the issue occurs when the terms are modified in a manner that materially changes the terms that are not favorable to the customer.

For instance, let’s say that the customer signs up for the account, but the bank cancels the promotion two days later and before the customer has a chance to fund the account with the required $100,000. Although the customer has not fully completed the offer, remember that the bank’s opening of the account under the promotional terms is essentially their legal agreement to pay the customer an incentive once the customer deposits $100,000. The bank cannot unilaterally cancel the agreement without at least offering some form of compensation or recourse to the customer.

However, it’s not that cut and dry. The legal implications depend on the extent of harm to the customer. For instance, if the promotion was pulled entirely, affecting both new and existing participants just seconds after the customer in our example signed up, this would result in less harm to the customer than a scenario where a customer has already initiated the transfer into the account.

Ultimately, even if the company provides the customer with a suitable resolution, there are times that the ringing of the proverbial alarm is still warranted. It’s important that the company’s actions are reviewed to ensure that consumers rights aren’t being compromised. Consumers play a crucial role in combatting unfair business practices, and raising concerns appropriately aids in effecting change that promotes a fair marketplace and protects consumers.