Assembly Bill A11007A

                                BILL NUMBER:A11007

TITLE OF BILL:  An act to amend the general business law, in relation to
rebate disclosures

PURPOSE OF THE BILL:

This bill would require any entity offering a rebate to conspicuously
disclose to the consumer what form the rebate will be issued in, if not
in cash or check, and if any additional fees related to the exercise or
non-exercise of the rebate may apply.

SUMMARY OF PROVISIONS:

Section 1 of the bill would amend General Business Law (GBL) § 391-p to
add new paragraphs (3)(a) and (b) to require any entity that offers a
consumer rebate to conspicuously disclose to the consumer (i) if the
rebate will be issued to the consumer in a form other than cash or a
check, such as credit, credit towards a future purchase, gift certif-
icate, gift card, general use prepaid card or any other form of compen-
sation, and (ii) if any additional fees related to the exercise or the
non-exercise of the rebate may apply.

Section 1 would also require that, any retailer advertising a rebate
clearly disclose if the rebate will be issued to the consumer in a form
other than cash or a check, such as credit, credit towards a future
              

purchase, gift certificate, gift card, general use prepaid card or any
other form of compensation.

Section 1 would also amend GBL § 391-p (4) of (GBL) by eliminating the
word "check," to clarify that the rebate may take any form the entity
offering the rebate deems appropriate.

Section 2 of the bill would provide for an effective date on the next
January 1 after enactment.

EXISTING LAW:

GBL § 391-p outlines New York State law which does not provide governing
rebates.

LEGISLATIVE HISTORY:

This is new bill.

STATEMENT IN SUPPORT:

In recent years, rebate offers have become an increasingly popular meth-
od of attracting consumers into retail establishments and induce busi-
ness. Consumers appreciate the opportunity to save money on items they
wish to purchase, and tend to respond favorably when rebates are offered
on such products.

Unfortunately, the manufacturer or retailer offering the rebate does not
always make the terms of the rebate clear to the consumer at the point
of sale. A national retailer recently advertised a $30 rebate for cook-
ware. The purchaser assumed the rebate would be in the form of a check.
However, after consumers remitted and received the rebate, they learned
that it was provided in the form of a credit of $30 towards another
purchase of a product from that manufacturer.  Additionally, when a
rebate is provided for in the form of a pre-paid card, the consumer
could face undisclosed fees for activation, checking of balances, and
account maintenance for periods of inactivity.

Accordingly, there is a need for greater disclosures in the rebate
advertisement and promotion process to enable the consumer to determine
if the deal is right for her or him. Since rebates are a useful market-
ing tool for manufacturers and retailers, and can provide consumers with
great savings, it is important that this discount mechanism remain a
vital part of the marketplace for both businesses and consumers, without
being used for misleading purposes

The proposed legislation seeks to provide consumers with pertinent
information to assist in their budgeting and purchasing decisions before
any purchase is made. Consumers have a right to know if the $150 rebate
on the washing machine they are purchasing, for example, will be remit-
ted to them in the form of cash or check, or if they will receive a
prepaid card, subject to additional fees, for future use in the retail
outlet where they purchased the appliance.

Consumers need all internal information available to them when making
decisions that affect their wallet, in order to weather the present
economic difficulties and spend wisely for their households.

BUDGET IMPLICATIONS:

There is no fiscal impact.

EFFECTIVE DATE:

The Act would take effect on the first of January next succeeding the
date on which it shall have become a law.