A05710 Summary:

BILL NOA05710
 
SAME ASNo Same As
 
SPONSORGalef
 
COSPNSRRosenthal, Englebright, Weprin, Seawright
 
MLTSPNSR
 
Add S397-b, Gen Bus L
 
Mandates that any article of merchandise advertised, and not available throughout advertised period, must be supplied at advertised price by seller within sixty days from the date the purchaser of such article is notified of its availability; specifies terms of raincheck and limited exceptions.
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A05710 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A5710
 
SPONSOR: Galef (MS)
  TITLE OF BILL: An act to amend the general business law, in relation to availability for sale of advertised merchandise   PURPOSE OR GENERAL IDEA OF BILL: This legislation relates to the availability of merchandise at a price lower than it is normally sold for, and outlines a detailed policy in relation to rain-checks.   SUMMARY OF SPECIFIC PROVISIONS: Section 1. The General Business Law is amended by adding a new section 397-b. § 397-b. Availability for sale of advertised merchandise. 1. Retailers who advertises merchandise at a reduced price, and do not have the item available during the advertised period, must by the request of a purchaser, offer to issue a rain-check unless: (a) the advertisement is in relation to mail order merchandise (b) the adver- tisement is of an article that is a one of a kind and the ad clearly states that (c) the advertisement states that a specific quantity is available (d) the advertisement states a rain-check is not available (e) the products are defined under subdivision 3 of section 2 of the Agri- culture and Markets Law. 2. The rain-check shall entitle the holder to purchase the advertised article within 60 days from the date of issuance, or for a period of 10 business days, from the first date of availability of the item, whichev- er shall be later. Substitute items can be offered should the purchaser accept the substitution. 3. The rain-check must include: (a) name, address, and telephone number of issuer, (b) date of issuance, (c) expiration date, (d) name, description and quantity of article, and (e) the advertised price. 4. The rain-check must contain the following notice: You may redeem this rain-check for the advertised item described on the other side within sixty days of issuance or for a period of ten business days from the first date of availability of the item, whichever shall be later. You will pay only the advertised price for this item. You are under no obli- gation to buy the item. 5. It shall be an affirmative defense to an alleged violation if the seller was unable to honor the rain-check because the seller did not receive a reorder from a supplier through no fault of the seller provided, however, that the seller maintain records sufficient of the situation. 6. This section shall not apply to a purchase for resale. 7. Nothing in this section shall be construed to relieve the seller from any other provision of law prohibiting the advertising of good or services with the intent not to meet reasonably expected demand. 8. No purchaser shall be required to prepay in order to obtain a rain- check. 9. Nothing in this section shall be construed to restrict the power of any county, city, town or village to adopt and enforce additional laws, which exceed the minimum applicable standards in this section. Section 2. Establishes the effective date.   JUSTIFICATION: The practice of "bait and switch" advertising which is deceptive within the statutory proscription (as in Section 349 (a) of the General Busi- ness 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 GOLDBERG V. MANHATTAN LINCOLN MERCURY 91985), and is taken from McKinney's. Enactment of this law would enable New York State to enforce long-standing Federal Trade Commission regulation and policy, court orders, and a 1972 New York City Regulation on bait advertising. Although many retailers have implemented rain-check policies with the interests of the consumer in mind, some retailers either do not have policies or employ policies that do not favor the consumer. The result is that many consumers view rain-check policies with jaundiced eyes. The credibility of many retailers' rain-check policies have eroded, creating an industry-wide crisis of confidence. Neither the consumer nor the retailer wins. Several studies have found that the Federal Trade Commission policies, New York City regulations, bait advertising guides, and general orders have not increased compli- ance with the premise that when supplies of an advertised item will not meet anticipated demand, the advertisement should disclose that fact. This bill would serve to statutorily recognize these current rules and regulations and provide for greater enforcement of them. Indeed, consum- ers would receive the protection they deserve from deceptive bait and switch advertising.   PRIOR LEGISLATIVE HISTORY: A. 1835-A of 2013/2014 A. 443 of 2011/2012 A. 10778 and S. 4445 of 2009/2010   FISCAL IMPLICATIONS: No fiscal implications are related to this legislation.   EFFECTIVE DATE: This act shall take effect on the one hundred eightieth day after it shall have become a law.
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A05710 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          5710
 
                               2015-2016 Regular Sessions
 
                   IN ASSEMBLY
 
                                      March 3, 2015
                                       ___________
 
        Introduced  by  M.  of  A. GALEF, ROSENTHAL, ENGLEBRIGHT, WEPRIN -- read
          once and referred to the Committee on Consumer Affairs and Protection
 
        AN ACT to amend the general business law, in  relation  to  availability
          for sale of advertised merchandise
 
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
 
     1    Section 1. The general business law is amended by adding a new section
     2  397-b to read as follows:
     3    § 397-b. Availability for sale of  advertised  merchandise.    1.    A
     4  retailer  who  advertises  an article of merchandise for sale at a price
     5  which is reduced, in good faith, to a price below the price  such  arti-
     6  cles are usually sold or offered for sale for in the store, and does not
     7  have  such  article available throughout the advertised period shall, on
     8  the request of a purchaser of such article, offer to issue  a  raincheck
     9  unless one or more of the following situations exists:
    10    (a)    The advertisement is made in relation to mail order merchandise
    11  as regulated by section three hundred ninety-six-m of this article.
    12    (b)  The advertisement is of an article that is one of a kind and  the
    13  advertisement clearly and conspicuously states such fact.
    14    (c)    The advertisement clearly and conspicuously states the specific
    15  quantity of the article available at the outset of the sale.
    16    (d)  The advertisement clearly and conspicuously states that  a  rain-
    17  check  is not available.  This exclusion may only be used if the article
    18  will not be offered for sale for at least one hundred twenty  days  from
    19  the expiration date of the advertisement.
    20    (e)  Products defined in subdivision three of section two of the agri-
    21  culture and markets law shall be excluded from the  provisions  of  this
    22  section, provided, however, that any retailer offering for sale or sell-
    23  ing such products may issue rainchecks pursuant to this section.
    24    2.    A  raincheck  issued pursuant to subdivision one of this section
    25  shall entitle the holder to purchase, at the store  issuing  such  rain-
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD00026-01-5

        A. 5710                             2
 
     1  check,  the advertised article at the advertised price within sixty days
     2  from the date of issuance or for a period of ten business days from  the
     3  first date of availability of the article, whichever shall be later.
     4    The  issuance  of  such raincheck shall constitute an agreement on the
     5  part of the seller to supply  such  article  at  such  price.    Nothing
     6  contained herein shall prohibit a seller from offering a similar article
     7  of  equal  or  greater  value  either  during the period covered by such
     8  advertisement of the article or within sixty days from the date of issu-
     9  ance of the raincheck, or the seller  and  purchaser  from  agreeing  to
    10  lengthen  the  redemption  period  of  such  raincheck. If the purchaser
    11  accepts substitution, such substitution shall constitute compliance with
    12  the provisions of subdivision one of this section.
    13    3.  The raincheck shall include at least the following information:
    14    (a)  Name, address and telephone number of the issuer.
    15    (b)  Date of issuance.
    16    (c)  Last date that the raincheck can be redeemed.
    17    (d)  Name, description and quantity desired of the article.
    18    (e)  The advertised price.
    19    4.  The raincheck shall contain the following notice:
    20    You may redeem this raincheck for the advertised item described on the
    21  other side within sixty days of issuance or for a period of ten business
    22  days from the first date of availability of the item, whichever shall be
    23  later.
    24    You will pay only the advertised price for the item.
    25    You are under no obligation to buy the item.
    26    5. It shall be an affirmative defense to an alleged violation of  this
    27  section  that  the  seller  was  unable  to honor a raincheck within the
    28  redemption period because such seller did not receive a reorder  of  the
    29  advertised  article  from  a  supplier  through  no  fault of the seller
    30  provided, however, that the seller must maintain records  sufficient  to
    31  show  that the advertised sale items were reordered in adequate time for
    32  delivery and in sufficient quantity to fulfill raincheck obligations.
    33    6. This section shall not apply to a purchase for resale.
    34    7. Nothing in this section shall be construed to  relieve  the  seller
    35  from  any other provision of law prohibiting the advertising of goods or
    36  services with the intent not to meet reasonably expected demand.
    37    8. No purchaser shall be required to prepay the purchase price or  any
    38  part thereof in order to obtain a raincheck.
    39    9. Nothing in this section shall be construed to restrict the power of
    40  any  county, city, town or village to adopt and enforce additional local
    41  laws, ordinances, or regulations which  exceed  the  minimum  applicable
    42  standards in this section.
    43    § 2. This act shall take effect on the one hundred eightieth day after
    44  it shall have become a law.
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