Reebok to Refund its Customers

The leading Sports and fitness gear manufacturer, Reebok International Ltd. which had resorted to deceptive advertising of its Toning Shoes range will be refunding about $ 25 million to the consumers. All the consumers who have bought Reebok’s toning shoes and apparel will be eligible for this refund.

The $25 million refund to its consumers is a part of the settlement with the Federal Trade Commission for making false claims. Reebok had claimed that the soles of their toning shoes comes with technology which strengthens and tones the muscles in buttocks and legs while advertising its RunTone and EasyTone range of running and walking shoes respectively. While talking in a press conference, the director of Federal Trade Commission’s Bureau of Consumer Protection, David Vladeck said that the claims made by the company are unsubstantiated and accounts for deceptive advertising.

The Federal Trade Commission compliant to the Federal Court states that the company falsely asserted certain numerical claims by saying things like walking with EasyTone range of shoes is proven to tone the hamstring muscles and increase its strength by about 11 percent as compared to regular walking shoes. Vladeck also said that the marketing campaigns of the companies should stick to substantiated product claims irrespective of how unique, funny or clever their campaigns are.

The consumers who have bought the toning shoes from Reebok are eligible for refunds and the same can be claimed by logging on to the government website, ftc.gov/reebok. The whole refund process is to be overseen by a federal judge. The percentage of reimbursement is not yet clear and the settlement will continue side by side with any pending class action lawsuits regarding the advertisement claims of the company’s toning footwear.

According to the agency, the company’s ad campaign ran during 2009 and 2010 after the shoes hit the stores in early 2009. The agency wants the customers to get their refunds as soon as possible, but the process may take some time, said Vladeck, who at the same time appreciated Reebok for its cooperation in the subject matter.

During the investigation, Reebok pulled out its advertisements with deceptive claims and also stopped manufacturing packaging and promotional materials with the deceptive claims. As per the terms of the settlement reached, Reebok cannot make any claims about the efficacy of its footwear range without any concrete scientific evidence backing those claims. Reebok is also prohibited from misrepresenting any scientific data regarding the toning shoes. Apparel manufacturers such as Adidas, Nike (NYSE:NKE) and Puma are in a highly competitive market and need creative advertising to grab their customer’s attention.

Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.