Senate Bill S7609A

                                BILL NUMBER:S7609A

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
it is not being offered 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
(3) 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,
including but not limited to credit, credit towards a future
purchase, gift certificate, gift card, general use prepaid card or
any other form of compensation, 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 to
clearly disclose if the rebate will be issued to the consumer in a
form other than cash or a check, including but not limited to 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) to eliminate the word
"check," to clarify that the rebate may take any form the entity
offering the rebate deems appropriate.

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

EXISTING LAW:

GBL § 391-p outlines New York State law governing rebates. In
addition, there is another GBL § 391-p, which prohibits the rental of
clothing articles previously worn.

LEGISLATIVE HISTORY:

This is new bill.

STATEMENT IN SUPPORT:

In recent years, rebate offers have become an increasingly popular
method of attracting consumers into retail establishments and induce
business. Consumers appreciate the opportunity to save money on items
they wish to purchase, and tend t6 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 cookware. 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 marketing 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 remitted 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.