Regulates and requires issuance of raincheck by retailer where advertised merchandise is not available for sale

This legislation defines raincheck, details the information which must be included on the raincheck and prescribes the manner in which affected retailers must inform consumers of the availability of rainchecks. Each retailer that advertises sale items would be required to clearly and conspicuously post a sign indicating where a raincheck can be obtained. Violation of any provision of the bill would subject a retailer to the provisions of Article 22-A of the General Business Law for having committed a false and misleading advertising practice and/or a civil penalty.

Justification

The practice of "bait and switch" advertising which is deceptive within the statutory proscription (as in Section 349(a) of the General Business Law) involves an advertisement and offer of a product which is not bona fide because what the merchant actually has on hand and intends to sell is significantly different from that which drew the potential customer in, and, hence, is a practice which does not include conduct of a seller in continually modifying proposed terms of a contract with the buyer as the negotiations proceed. This judicial decision was set forth in GOLD- BERG V. MANHATTAN LINCOLN MERCURY (1985), and is taken from McKinney's. Enactment of this law would enable New York State to enforce long-stand- ing Federal Trade Commission regulation and policy, court orders, and a 1972 New York City Regulation on bait advertising. Bait advertising is the practice of making an alluring offer to sell a product which the advertiser does not intend or want to sell in order to entice a consumer into an establishment where, it expected, other purchases will be made. Many retailers currently have policies regarding the issuance of rain- checks.

Although a great many of these policies were designed and operate with the interests of the consumer in mind, a number of retailers, albeit a minority, either do not have policies or employ policies which do not consider the consumer. It is because of this that many consumers look

upon raincheck policies (even those which are consumer oriented) with jaundiced eyes. Indeed, the credibility of many retailers' rain- check policies has eroded, creating an industry-wide crisis of confidence. This situation serves the best interests of neither the consumer nor the retailer. Several studies have found that the FTC and New York City regulation, bait advertising guides and orders have not resulted in compliance with the generally accepted premise that when supplies of an advertised item will not meet reasonably anticipated demand, the adver- tisement should disclose that fact. This bill would serve to statutorily recognize these current rules and regulations and provide for greater enforcement of them. Indeed, consumers would receive the protection they deserve from deceptive bait advertising.

Fiscal implications

None.

Effective date

This act shall take effect on the sixtieth day after it shall have become a law.