Alright, imagine you're running a company and you wanna increase your market share.
You decide to run a promotional giveaway, good idea - those always work. All you need
to do is get the legal end of things squared away and you've got a license to print money.
Look, I know hiring the lawyers and going over all the paperwork and fine print is a pain in the ass
but you gotta get that part right, these giveaway things can be a legal nightmare if
you don't make sure you've covered everything. Ok, now you're gonna run an ad letting everyone
know about the giveaway. What are you gonna put in the ad? A harriet jet? Uh... what? You're
going to advertise the harriet jet as part of the giveaway? D-did you run this by legal? No?
The marketing team told you not to worry about that? ....oh God. Oh Jesus Christ. Oh no.
In 1996, Pepsi was looking to take some market share from the dominant Coca-Cola. You know, I've
bizarrely done a few videos involving Pepsi and they all seem to start like that. Pepsi is like
a saturday morning cartoon villian, always coming up with zany schemes to achieve one singular goal.
What they came up with, was Pepsi Stuff, a sort of loyalty program where you would receive points for
purchasing their products, which you could then redeem for premium Pepsi merchandise. Y'know, the
usual shite, t-shirts and caps and all that crap. To promote Pepsi Stuff, they launched an ad
campaign showcasing some of the things you could get from the Pepsi catalog.
Of course, that doesn't make for a very memorable promotion, so the ad jokingly ends with the
inclusion of a McDonnel Doughlas AV-8B Harrier II, listed at a cost of 7 million Pepsi points.
Now, as you can probably imagine, Pepsi had no intention of giving away a harrier jet,
they just used the imagery to add a bit of flair to their advertisement, they didn't add it to the
catalog. Of course, no one could plausibly even amass 7 million Pepsi points. A 12-pack of cans
was worth 5 points, so at that rate you'd have to buy 16.8 million cans. That's 46,000 cans
every day for a year. It would've worked out at about 4 million dollars to pay for all that.
Now, if you're a particularly astute viewer, you've already realised how Pepsi has fucked
up here. A harrier jet does not cost 4 million dollars. The one in the ad cost somewhere in the
region of 33 million dollars. So, at 7 million Pepsi points, the harriet jet in the ad was
actually a steal! But still, nobody's gonna buy that much Pepsi and count up all the points right?
Well, this is where Pepsi fucked up again...
21-year-old business student John Leonard saw the ad for the harrier, and quickly worked out that
it was worth much more than Pepsi was asking for it - meaning it could be quite the deal,
if one had the capital to invest. And so, Leonard went about hiring lawyers
and consultants to go over Pepsi's promotion and where it stood in relation to advertising law.
After spending about 4 thousand dollars in fees, it was determined that Pepsi would
have to honour the offer for the harrier jet, even if it wasn't in the catalog.
Leonard was now determined to claim his harrier jet. But he was never gonna invest 4 million
into this, right? Well, he didn't have to. There was a sort of loophole. To claim something from
the catalog, Pepsi only required you to send in 15 Pepsi points, and then you could just buy the rest
of the points at 10 cents each. This was by far the cheapest way to get anything from the catalog,
and it meant the 7 million point jet would only cost about 700,000 dollars. Oh Lord.
Using contacts he had made with wealthy clients while working as a climbing instructor,
Leonard was able to convince them to buy in on his plan, and raised the 700,000 dollars.
He sent a check for this and 15 Pepsi points in a letter to Pepsi asking to redeem the harrier jet.
So what did Pepsi do?
Well, as you can imagine, Pepsi responded saying that the jet
was not actually part of the promotion and was just used to create an entertaining ad,
returning John Leonard's check and throwing in some free coupons out of pity.
From here, the case developed into a lawsuit, with Leonard taking Pepsico to
court over failure to honour their advertised offer. After three years of legal proceedings,
the case finally found itself in front of a judge, where the case hinged on whether or not Pepsi's
TV ad consitituted a legally binding offer. The judge ruled it didn't, for three main reasons;
1) Ads are generally merely considered requests for consumers to deal,
and are not considered legally binding until the advertiser accepts an offer from a consumer.
2) It was ruled any reasonable person would conclude the ad
was obviously a joke and not a serious offer.
3) There was no contract in place, due to lack of written agreement from both parties.
Obviously the law is a little more complicated than that,
but I'm not a lawyer and neither are you so the general gist of the matter will suit both of us.
Honestly pretty lame move on Pepsi's part, even if they were legally within their rights. I mean
it was obviously a joke but y'know, if someone goes through all that trouble to call your bluff,
maybe there's a better way of handling it. Or just don't make claims you're not prepared to back up,
even if they are in jest. After the debacle, Pepsi changed the cost of the harrier in the ad
from 7 million points to 700 million. As for John Leonard, well, I admire his spirit.
Some have critisized his demands, saying even if he got the damn jet, he wouldn't be able to fly
it, or pay for a pilot or have anywhere to store it or pay for a hangar. I think that's a little
short-sighted. Considering the price he would have paid for it, he would have made a killing
auctioning it off to someone who can afford those things. Right? I mean there's taxes involved too
of course. And maybe you'd even need special licenses to sell this shit in the first place.
I mean he'd never have got the jet without it being demilitarized first, but... y'know what?
I'll let you guys advise me on this in the comments. I've already told the damn story.
And if you're interested in a loyalty program that won't misleadingly advertise you things, why not
become a member of my channel? You'll receive cool badges and emojis for when you comment,
and at higher tiers you'll even get updates about upcoming videos, as well as formula 1 sports cars,
dates with super models, and vacations on private islands -- wait, wait, wait,
I sense I've made a mistake. Hmmmm. I can't verify which of these are actual perks of channel
membership and which are not... So let's just say you may be entitled to all or none of them.
Got a problem with that? Go to hell, bastard. There, I think that's all my legal bases covered.
What's that? Yeah, yeah,
I went over that. Yep,
definitely got the "go to hell" part in there. Oh yeah, nearly forgot about that. Subscribe!