The Federal Trade Commission's Endorsement Guides, revised in 2023, say a material connection between a brand and the person praising it can include "the provision of free or discounted products ... to an endorser, regardless of whether the advertiser requires an endorsement in return" (16 CFR 255.5 (opens in new tab)).
Read the last clause again, because it is the easiest one to miss. You do not have to ask for a post. The candle you mailed with a cheerful "no pressure!" card is a material connection, and if the creator posts about it, their followers are owed a disclosure unless they would already expect the connection.
That sounds like a buzzkill. It isn't, really. Gifting is still one of the friendliest, cheapest ways for a small maker to get in front of a new audience. Influencer gifting for a small business comes down to four steps: ask in writing for a clear disclosure, give the creator the wording, ask to be tagged so you can check the post, and count each box at what it cost you. Most of that is a few extra sentences in your outreach note. This guide walks through each problem a first gifting round runs into, with the fix right beside it.
To keep it concrete, follow Marisol, a composite candle maker (not a real person) who is about to send her first twelve gift boxes.
The gift counts even when you ask for nothing
The problem: Marisol assumes the disclosure rules only apply to paid sponsorships. She is not paying anyone. She is just being nice.
The fix: The Guides cover free product with no strings attached. The Guides include an example that could have been written for a maker: a tool company sends a woodworking influencer a free lathe "in the hope that the influencer would post about it." If viewers don't know it was free, the woodworker should disclose it, and the manufacturer "should advise the woodworker at the time it provides the lathe that this connection should be disclosed" (16 CFR 255.5(b)(7) (opens in new tab)).
Swap the lathe for a candle and that is Marisol's situation exactly. The FTC's staff FAQ answers a similar question from a hunting and camping creator whom knife makers send free knives, hoping for a review. It says what matters is whether the free product "might affect how your audience views what you say about it", not whether the creator was obliged to post (FTC, Endorsement Guides: What People Are Asking (opens in new tab)).
There are two limits. No disclosure is needed when the audience already expects the connection (under 16 CFR 255.5(a) (opens in new tab), the test is whether a significant minority of the audience would not expect it), and none when the gift is "so small" that it would not change how anyone weighs the post. On the second, the same FAQ says there is "no threshold amount," and that "it's always safer to disclose." A $34 candle is not a sticker.
The brand is on the hook, not only the creator
The problem: Marisol figures disclosure is the creator's job. Creators are the ones posting.
The fix: It is the creator's job too, but the Guides say plainly that "an advertiser may be liable for a deceptive endorsement even when the endorser is not liable" (16 CFR 255.1(d) (opens in new tab)). The same paragraph says advertisers should do three things:
- Give endorsers guidance on disclosing the connection and not making misleading statements.
- Monitor whether they comply.
- Act when they don't.
The Guides are not law themselves, but the FTC staff FAQ (opens in new tab) notes that practices inconsistent with them can lead to enforcement under Section 5 of the FTC Act, so they are the standard to work to.
That sounds like a compliance department. For a twelve-box gifting round it is far smaller. The same FAQ (opens in new tab) answers the exact case of a brand that only sends free products. Training material alone is not enough. The brand should ask creators to clearly disclose the gift, tell them how, ask them to tag the brand, and then watch the tagged posts. The FAQ also says it is "unlikely that the activity of one rogue influencer would be the basis of a law enforcement action" against a brand with a reasonable program in place.
So the whole program fits in one note and one spreadsheet tab. Here is the note.
The ask: an influencer outreach note, annotated
The problem: Marisol's first draft says "Would love it if you shared!" and nothing else. It is warm and it leaves all three of the Guides' asks undone.
The fix: Put the disclosure request, the wording and the claim limits into the first message, before anything ships. Here is her revised note to Dana, a made-up creator, with callouts below.
Hi Dana, I make small-batch soy candles in [your town], and your [specific video or series] is the reason I'm writing. (1) I'd love to send you our cider candle and a travel tin, free, with no obligation to post. (2)
If you do share it, please open the caption with something like "Gifted by [Your Shop]" or "#ad". In a video, say it out loud and show it on screen too. (3) Tagging @[yourshop], in Stories as well, helps me see it. (4)
One small ask: it's a scented candle, so please don't describe it as calming anxiety or cleaning the air. Scent, burn time and how the room feels are all fair game. (5)
Want one? Just reply with a shipping address. Thanks either way. Marisol
Before sending your own version, delete the markers (1) to (5), fill in every [bracket], and replace Dana's name with the creator's, and Marisol's name and product with your own.
What each callout is doing:
- A specific reason for choosing this creator. This one isn't a compliance point. It's why the note gets answered at all, and it tells the creator you've watched their work.
- "No obligation to post." This is fine, and kind. It does not remove the need for disclosure. The connection exists the moment the box ships.
- The disclosure and where it goes. This is the Guides' first ask, guidance, put in the creator's words. The start of the caption matters because the FTC's Disclosures 101 for Social Media Influencers (opens in new tab) says a disclosure behind a "more" click or only in a profile is likely to be missed. It also notes that some viewers watch without sound and others miss on-screen words, which is why the note asks for a video disclosure both spoken and shown.
- The tag. It is how the brand monitors, the Guides' second ask, and it is what the FTC staff FAQ (opens in new tab) tells gift-only brands to request.
- The claim boundary. The brand can be liable for misleading statements made through its endorsers, so tell them what they can't say. Health claims are a common trap for candles, soap and skincare.
Notice what the note does not do. It does not ask for a positive post or a five-star review, and it does not offer a second candle for a glowing one. A reward tied to praise makes the post a paid endorsement the brand has to stand behind, and for reviews on your site or a marketplace it is now a specific violation, covered below.
What one gifting round actually costs
The problem: Marisol thinks the round costs twelve candles. At $34 retail that feels like $408 of product, which is wrong twice: it counts retail instead of cost, and it leaves out the postage and her time.
The fix: Count what each box costs to send, at your cost. Her figures below are illustrative; use your own label price and make cost.
| Line | Per box | Twelve boxes |
|---|---|---|
| Cider candle, cost to make | $8.60 | $103.20 |
| Travel tin, cost to make | $3.10 | $37.20 |
| Gift box, tissue and note card | $2.40 | $28.80 |
| Postage (her own label price) | $8.90 | $106.80 |
| Out of pocket | $23.00 | $276.00 |
| Her time finding creators and writing notes (3 hours at $25) | Whole round only | $75.00 |
| Full cost of the round | Whole round only | $351.00 |
Say five of the twelve creators post. That makes the real figure about $70 per post ($351 ÷ 5). That number is worth knowing before round two, when the question is whether a $70 post beats whatever else $351 could buy.
Two bookkeeping points follow from the table. First, the product leaves inventory at cost, $14.10 a box, not $34. Second, it is promotion, so it can be reported on the Advertising line rather than left in cost of goods sold. The guide on whether you can write off products you give away covers the tax side in full. Her three hours never reach Schedule C, but they are real, and leaving them out is how gifting starts to feel free.
This is the part a notebook handles badly by December. In Ardent Seller, Marisol packs a box and logs a Loss transaction for the candle, the tin and the packaging, tagged with the Advertising tax category, with Dana's handle in the notes. The stock drops by one of each at its recorded cost. The Schedule C report moves that cost out of cost of goods sold and onto Line 8, and the postage, logged as an expense in the same category with the same handle in its notes, lands on the same line. At year end, the round is already a list: the Advertising-tagged transactions with a creator's handle in the notes, not a reconstruction.
Disclosure wording that works, and wording that doesn't
The problem: Creators have habits, and some of the common ones don't pass. The FTC staff FAQ (opens in new tab) does a lot of its work by naming the specific phrases that fail.
The fix: Give creators a phrase from the left column, so they don't improvise one from the right. Every entry below comes from that FAQ or from the FTC's Disclosures 101 for Social Media Influencers (opens in new tab).
| Likely enough | Not enough on its own |
|---|---|
| "Gifted by [Brand]" (when the product is all they got) | "Gifted" with no brand name |
| "Thanks [Brand] for the free [product]" | "Thanks [Brand]" or "thank you" |
| "Ad", "Ad:" or "#ad" at the start of the post | "sp", "spon" or "collab" |
| "Paid post for [Brand]" | "#ambassador" or "partner" alone |
| "[Brand]_Partner" where space is tight | A brand tag with no disclosure |
| On video: said aloud and shown on screen | Only in the comments, the profile or behind "more" |
Three details worth passing along. The FTC staff FAQ confirms that "#ad" covers a free product as well as a paid post. A disclosure stuck to the end of a brand hashtag, like the FAQ's "#coolstyllead" (a made-up brand, Cool Stylle, plus "ad"), is easy to miss. And a TikTok caption is "very unlikely to be clear and conspicuous", which is why the FAQ points creators to large on-screen text. Elsewhere it adds that a disclosure shown and spoken at the same time is more likely to work.
Platform "paid partnership" labels are fine to use, but the FAQ says not to rely on them alone: "the ultimate responsibility for clearly and conspicuously disclosing a material connection rests with the influencer and the brand."
What influencers can say about your product
The problem: A delighted creator says Marisol's candle "totally cured my insomnia." It's flattering, and Marisol can't back it up.
The fix: Endorsements cannot make a claim the brand couldn't make itself. The FTC's Disclosures 101 for Social Media Influencers (opens in new tab) says creators can't make up claims that "would require proof the advertiser doesn't have", and gives the example of scientific proof that a product can treat a health condition. Since the brand can be liable for misleading statements made through its endorsers, the fix is the line in callout 5, set before the post: here is what you can say, here is what you can't.
When a post does cross the line, act. That is the Guides' third ask. A friendly message asking for an edit is usually all it takes. Note that you asked and when.
The same logic covers reviews. If gifted customers review on your site or a marketplace, the reviews need to disclose the gift (16 CFR 255.5 (opens in new tab)). Since 2024 the FTC's rule on consumer reviews has also made it a violation for a business to provide incentives "conditioned expressly or by implication on" a review "expressing a particular sentiment, whether positive or negative" (16 CFR 465.4 (opens in new tab)). "Free candle for an honest review" is a material connection the review must disclose. "Free candle for a five-star review" is prohibited outright.
Monitoring influencer posts without a software budget
The problem: Marisol has no monitoring tool, and the FTC is not going to tell her how often to look.
The fix: It won't, on purpose. The FTC staff FAQ (opens in new tab) says there is "no one-size-fits-all standard," that monitoring software "might be too expensive for some companies," and that the effort needed depends on the product and the claims involved. For a gift with no contract, it suggests that monitoring "for at least a few months" would probably be reasonable.
A small brand can meet that with one row per box in a sheet, with these ten columns:
- Creator
- Handle
- Shipped (date)
- Delivered (date)
- Post link
- Disclosed: start of caption, on screen, spoken, or no
- Claims OK: yes, or the exact phrase that needs editing
- Fix asked (date)
- Fixed? (yes or no)
- Check until: the delivery date plus at least three months
Then set one reminder that repeats every two weeks: check every row that is at least two weeks past its delivery date and not yet past its check-until date, searching the creator's account too, since not every post tags you. Stories disappear, so when a tag notification arrives for one, screenshot it for the row while it is live. For anything you pay for, the FAQ's answer is to require approval before the post goes up.
Twelve rows, one repeating reminder, one honest note before the box ships. That is a gifting program the Guides would recognize, and one you can run from a kitchen table between pours.
Gifting goes better when the boxes, the cost and the tax line are already sorted before the first creator replies. Start free with Ardent Seller and log each gifted box as it leaves the shelf, so every round can be counted at year end.
Related reading
- Can You Write Off Products You Give Away? — The tax side of every free box: why the deduction is cost, not retail, and when the Advertising line beats cost of goods sold.
- How to Get Repeat Skincare Customers — What to do with the new buyers a good gifting round sends you, timed to how fast they use the product up.
- Email Marketing for a Handmade Business — Turning a creator's audience into people you can actually reach again.
Free resources
Two free downloads that pair well with a first gifting round:
- 30-Day Social Caption Starter — Plan your own posts around a gifting round, so your feed is ready when creators send their followers your way.
- Schedule C Tax Expense Tracker — A place to record each box's cost and postage on the Advertising line if you are not using inventory software yet.
This article is provided for educational purposes only and does not constitute legal, tax, or accounting advice. Advertising disclosure rules, FTC guidance and tax treatment vary by situation and change over time. Consult a qualified attorney, CPA or tax preparer before making decisions that affect your business.