RETAIL TRADE; REBATES; MAIL-ORDER INDUSTRIES;

RETAIL TRADE;

Other States laws/regulations; Connecticut laws/regulations;

OLR Research Report


July 14, 2003

 

2003-R-0523

MAIL-IN CONSUMER REBATES

By: Daniel Duffy, Principal Analyst

You asked for a survey of state laws concerning manufacturer mail-in rebate offers.

SUMMARY

We identified only five state laws concerned with manufacturer mail-in rebates offered to retail consumers. Three are concerned with rebate advertisements. Two are in Connecticut; the others are in California, Kentucky, and Maine.

In Connecticut, it is an unfair or deceptive trade practice for a retailer to advertise the net price (the price after a rebate has been deducted) of an item unless the retailer pays the amount of the rebate to the consumer at the time of the sale. A retailer who advertises the selling price and the amount of the rebate is not required to provide the amount of the rebate.

Connecticut has a law specific to advertising rebates on any kind of liquor. The advertisement must contain: the selling price before the rebate is deducted, the amount of the rebate, the net price, and the date the rebate offer expires. All statements must be made in the same font size, color, and style.

California prohibits advertising the net price after the amount of a rebate has been deducted unless the advertisement also clearly and conspicuously states the price actually paid to the retailer.

Kentucky’s law permits liquor sellers to offer rebates. It states that rebates may be redeemed, apparently at the discretion of the provider, at the point of sale or through the mail.

Maine allows brewers and vintners to offer rebates.

CONNECTICUT

Unfair Trade Practice

Connecticut has two laws concerning manufacturer mail-in rebates. The first makes it an unfair or deceptive trade practice to advertise the availability of a manufacturer’s rebate by displaying the net price of the item unless the retailer provides the amount of the rebate to the consumer at the time of the sale. A retailer is not required to give the purchaser the amount of the rebate if the retailer advertises that a rebate is available without stating the net price. The regulation defines “net price” as the ultimate price paid by a consumer after he redeems the manufacturer’s rebate (Conn. Agencies Reg. 42-110b-19(e)).

Liquor Advertisements

The second law deals solely with liquor sales. It was adopted in 2002 because another state regulation prohibits liquor retailers from offering free goods to consumers (Conn. Agencies Reg. 30-6-A40(f)). An attorney general’s opinion stated that the net effect of the two regulations was to prohibit liquor retailers from advertising the availability of a manufacturer’s rebate under any circumstances (8 Op. Conn. Atty. Gen. 31 (1989)).

The law allows liquor retailers to advertise the availability of a manufacturer’s rebate or a product’s net price. It sets requirements on the advertisement. It must contain: the selling price before the rebate is deducted, the amount of the rebate, the net price, and the date the rebate offer expires. All statements must be made in the same font size, color, and style.

The law defines “advertise” as making any statement in connection with the solicitation of business by a liquor retail permittee. It includes statements in newspapers or other publications. “Manufacturer’s rebate” means the amount payable through an offer by a liquor seller other than the retailer to refund all or a portion of the selling price to a consumer. “Net price” means the final price paid by the consumer after deducting the rebate amount of the rebate (CGS 30-68n).

CALIFORNIA

California prohibits advertising a price that requires the buyer to send a coupon to the manufacturer for a cash rebate unless the advertisement clearly and conspicuously states the price actually paid to the retailer and the final price including the coupon (Cal. Bus. & Prof. Code 17701). A violator is guilty of a misdemenor.

KENTUCKY

Kentucky specifically allows liquor manufacturers and retailers to give and advertise rebates (K. R. S. 244. 461). The law states that rebate coupons may be redeemed at the point of purchase or through the mail. If through the mail, the consumer must submit the “required proof of purchase. ”

MAINE

Maine allows brewers and vintners to include mail-in offers in packages to be sold for off-premises consumption (Me. Stat. T. 28-A 708).

DD: ro