What Is Promotional vs Transactional Messaging?

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Transactional and promotional messages are regulated differently under the law. Learn the difference between the two in this easy-to-understand overview.

The uses for text messages are diverse. We’ve seen customers use our platform to share wedding photos, send traffic alerts, and promote their stores. It makes sense that more and more businesses are turning to SMS to connect with their customers. After all, texting is one of the most reliable marketing channels available.

However, in order to keep consumers safe from spam and unwanted messages, texts are regulated by the U.S. Federal Communications Commission (FCC) and the Telephone Consumer Protection Act (TCPA).

As part of their regulatory measures, the TCPA and FCC draw a distinction between promotional messages and transactional messages. Therefore, anyone using texting as part of their communication strategy should understand this important difference.

What Are Promotional Messages?

These are messages sent with the purpose of increasing sales, promoting your product, or raising awareness about your business. You may have heard promotional messages referred to as marketing or advertising messages. In the eyes of the TCPA, these are all synonymous.

Promotional text messages are a great addition to any business’s marketing plan under one condition. You must have permission from your customers. Express written consent is required to send promotional texts. Express consent can never be implied or assumed. It must be written electronically, on paper or in a recorded verbal agreement.

Examples of Promotional Text Messages

Any text message that is intended to promote your organization is considered promotional, including the following:

  • Coupons, discounts, and offers
  • New product announcements
  • Sweepstakes
  • Fundraising requests
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What Are Transactional Messages?

These are messages which contain information that is necessary for your customers to use your product or service. The important term here is necessary.

As we mentioned above, express consent can never be assumed. For example, if a patient provides their number for verification purposes when picking up a prescription, they’re not automatically consenting to prescription refill reminders. While some consumers may find prescription reminders helpful, they’re not necessary and therefore don’t constitute a transactional message.

This exact scenario occurred in the case of Kolinek v. Walgreen Co. Walgreens eventually settled for $11 million.

This hefty payout shouldn’t scare you away, but it should highlight the importance of always complying with and keeping in mind TCPA regulations. Now you may be asking, “Well…what does constitute a necessary transactional text?” We’ll explain:

Examples of Transactional Text Messages

Transactional texts usually contain additional information that customers have requested. Customers consent to transactional texts when they provide their number. For example, if during a checkout process users are given a prompt that says “provide your mobile number for shipping and delivery updates,” they provide consent by entering their numbers. Think of the following:

  • Order confirmations with tracking numbers
  • Two-factor authentication
  • Password resets
  • Reservation confirmations (With prompt to reply Y/N to confirm)
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Why Does This Difference Matter?

In the end it come down to consent. You always need to have permission to text your customers. What constitutes permission varies based on whether the messages you’re sending are transactional or promotional. And remember, if someone consents to transactional messages, they’re not by default consenting to promotional messages too.

Penalties for TCPA violations are steep, so it’s best to always err on the side of caution and make sure you have express written consent before sending any texts.

Test Your Knowledge

Review the text messages below and determine whether they would be considered promotional or transactional.

Order number 31415 is on its way. Visit example.com/31415 to track your shipment.

Answer (highlight to reveal): Transactional

Thanks for shopping with us! Based on your purchase, we think you’d love this product: example.com/productrecommendation

Answer (highlight to reveal): Promotional

Please confirm your appointment with Dr.Fridel tomorrow at 7 a.m. Reply Y for Yes or N for No.

Answer (highlight to reveal): Transactional

Your haircut appointment with Larissa is confirmed for tomorrow at 1 p.m. As a thank you, you can book additional services at 50% off here: example.com/services

Answer (highlight to reveal): Promotional

This advice is for informational purposes only and is neither intended as nor should be substituted for consultation with appropriate legal counsel and/or your organization’s regulatory compliance team.

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