Requires disclosure to consumers of the type of rebate being offered, whether additional fees may apply, and remittance of the rebate to the consumer

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.