Texting consumers is a very effective means to drive engagement and ultimately sales. Text messages have outpaced emails when looking at conversion and click-thru rates. In fact, 95 percent of texts are read in 90 seconds or less. While text messages can be a great way to engage with prospects and customers, the FCC’s Telephone Consumer Protection Act (TCPA) is a regulation you need to be mindful of.
These statistics help illustrate the importance of complying with the TCPA when calling or texting cellphones:
$6.6 million – Average cost of TCPA Class Action
- 10x –Growth in TCPA complaints filed in the last decade
- 87 – Number of TCPA class actions filed in April 2020
- 1,705 – Number of TCPA complaints filed YTD
- 55 percent – Percent of households that are cellphone only
Restaurants are being targeted for various reasons for non-compliance with the TCPA, but a review of quick serve restaurant cases highlight how consumers and law firms are successful:
Papa Johns: $16.5 million settlement due to texting pizza specials to consumers without their consent.
Checkers: $3.5 million settlement due to texting digital coupons to consumers and not honoring opt out requests
Pizza Hut: $6 million settlement due to texting a friend forwarder campaign with coupons where loyalty members signed up their friends for deals
Denny’s & Sonic: both quick serve restaurants have pending TCPA litigation for similar allegations
These examples are all common campaigns deployed by quick-serve restaurants to engage with customers and increase revenue. If a company has a loyalty base of consumers who have signed up for a rewards program, want to receive deals, texted a short code, or have provided their phone number for other purposes, the TCPA must be followed. Below is a quick list of considerations.
Quick assumption: Most quick-serve restaurants are using an automated system to send both informational and promotional texts. Examples include “blast campaigns” (upcoming sale) or “triggered campaigns” (signed up for rewards).
Quick point: Just because a text message says a store is having a sale but doesn’t ask the consumer to buy anything on the message, some may think it’s not considered “telemarketing”. This is wrong. Any plan to sell now or in the future through direct marketing is telemarketing and subject to the TCPA.
Here are my top 5 things to consider to avoid a TCPA lawsuit:
Obtain consent. This is not achieved by simply having a number provided by the consumer. Instead, the consumer must affirmatively agree to receive promotional calls/texts by automated means. This is done through a clear disclosure and can be accompanied by an unchecked checkbox.
Honor opt-outs. This seems obvious, right? Provide instructions on how to opt out and look for other phrases like “stop/quit/cancel”. Opt-outs should occur immediately with most common texting platforms.
Keep records. If a company receives a complaint, they will want to be able to respond confidently and records help to do that. The key records to maintain are texting records (the phone numbers texted, the date/time of the text, and the content of the text), consent opt-in forms, and opt-out requests from consumers with dates. Ask yourself: what records do you need to prove you had consent, and what records prove you didn’t text a consumer after they opted out?
Only text consumers between the hours of 8AM and 9PM according to their time zone. It is better to base a consumer’s location on their address and not phone number due to cellphone mobility. If texting a California number at 8PM, but the phone owner lives in New York, a company might get a few complaints.
Monitor compliance with these items. This is another one that may seem obvious, yet most companies fail to do so. It is a virtual guarantee a company will find issues with most audits.
Bonus—here is a more comprehensive checklist on how to achieve a Safe-Harbor defense.
This article is not intended to be a scare tactic. The TCPA legal landscape is rampant and consumers are more aware now than ever of their rights. A quick Google search of “Fast Food TCPA” helps to illustrate the fact that this industry, like most, is not immune. However, with proper compliance parameters in place, quick serve restaurants can enjoy the benefits of texting with consumers with peace of mind.
Paul Gipson is focused on U.S. and international direct marketing compliance regulations at Compliance Point. He works with clients in a variety of industries and is dedicated to providing reliable and practical consulting services. He also is a board member of the PACE association. Paul has a Master’s Degree in Business from the University of Georgia (Go Dawgs!) and has certifications in privacy, six sigma, data and marketing. He may be reached at pgipson@compliancepoint.com.
