Canada: Truth In Consumer Rebate Programs

Last Updated: June 17 2009
Article by Bill Hearn

The Competition Bureau (the "Bureau") recently signalled its interest in and explained its approach to false or misleading consumer rebate programs in a draft Information Bulletin entitled "The Application of the Competition Act, the Consumer Packaging and Labelling Act and the Textile Labelling Act to Consumer Rebate Promotions" dated March 31, 2009 (the "Rebate Bulletin").

Retailers and manufacturers sometimes use consumer rebate programs to attract consumers who might otherwise find their products too expensive to purchase. Rebates may be implemented either instantly or by delayed payment (usually by mail or Internet). An instant rebate is one that is applied immediately when an item is purchased from the retailer. A mail-in rebate is only applied after the consumer has purchased the product at the full price and redeems their rebate with the manufacturer at a later date.

The Rebate Bulletin describes the following examples that the Bureau views as false or misleading representations. These examples are, however, only illustrative. Moreover, the Rebate Bulletin is not binding on the Commissioner of Competition, whose enforcement decisions depend on the circumstances of each case.

Inadequate Disclosure

When conditions, limitations and exclusions to rebates are not brought to consumers' attention, consumers may be misled since their general impression of the rebate and price of the product may be incorrect. Conditions may include requiring the purchase of another product while a limitation may include a deadline to submit rebates. Conditions, limitations and exclusions to consumer rebate programs are permitted so long as they are clearly communicated to potential consumers. Only disclosing them inside product packaging or on the website to which the consumers go to apply for their rebate will likely be inadequate to counter consumers' general impression.

Rebates Disguised As The Sale Price

If a rebate must be mailed-in after purchasing the product from the retailer, the retailer cannot advertise the after-rebate price of the product as the sale price because it would be misleading in two respects. First, consumers will be surprised to learn that they have to pay the full price up front with the retailer. Second, the consumer will pay more tax than expected because they will have to pay taxes on the full price and not the after-rebate price.

Mail-In Rebates Disguised As Instant Rebates

If a mail-in rebate is not clearly labelled as such, it may mislead consumers to believe that the mail-in rebate is an instant rebate. As is the case with rebates disguised as the sale price, consumers will be surprised to learn that they must pay the full price at the cash register. discounts on future purchases disguised as rebates

In some situations, manufacturers and retailers provide consumers with gift cards or discounts for future use when they purchase their products. Some manufacturers and retailers, however, try to pass off these future-use gift cards and discounts as rebates. The Bureau's investigation of The Brick Warehouse's ("The Brick") art promotion is one example of how the Bureau will investigate situations where discounts on future purchases are disguised as rebates. The Brick advertised an $80 mail-in rebate on the purchase of art. However, when consumers tried to redeem their rebate with The Brick, they instead received an $80 gift certificate for a future purchase. On March 26, 2009, after the Bureau's investigation, The Brick agreed to provide consumers who purchased its art with an $80 rebate cheque and discontinued its art promotion program.

Mail-In Rebates That Are Not Fulfilled

There may be times when consumers have only received a partial rebate payment or no payment at all while expecting to receive their full rebate after completing the mail-in rebate process. In some of these cases, mail-in rebates are not honoured because the deadline was not fully and clearly disclosed. Other times, rebates are not received until after an unreasonable delay. Finally, rebates may be delivered in envelopes that look deceptively like junk mail which may result in consumers accidentally disposing the rebate cheques. The Bureau views such practices as false or misleading rebate representations.

Best Practices

The Bureau suggests the following best practices to lessen the likelihood of a manufacturer or retailer making a false or misleading rebate representation:

  • prominently and clearly disclose all rebate conditions, limitations and exclusions that could contradict consumers' general impression;
  • show the price consumers will effectively pay;
  • clearly indicate the amount of the rebate that may apply; and
  • clearly indicate the type of rebate offered (instant or mail-in).

Ordinary Selling Price

The Bureau warns that when making representations about consumer rebate promotions, manufacturers and retailers should be mindful of the ordinary selling price provisions of the Competition Act. Prior to offering an instant rebate, retailers and manufacturers who sell directly to consumers should determine whether they meet the time and volume tests set out in these provisions.


The Rebate Bulletin provides helpful guidance for manufacturers and retailers striving to ensure their consumer rebate programs are neither false nor misleading. It also signals that the Bureau sees this area as one of its enforcement priorities.

With the recent enhancement of remedies under the Competition Act (including the 100-fold increase in penalties for businesses violating the civil misleading advertising provisions - i.e., from a maximum penalty of $100,000 to $10,000,000 for the first offence), care should be taken to ensure compliance. This care may include getting specific advice from legal counsel that your proposed rebate program is compliant. It may also include getting a binding written opinion on the proposal from the Bureau which the Bureau will provide for a fee.

The foregoing provides only an overview. Readers are cautioned against making any decisions based on this material alone. Rather, a qualified lawyer should be consulted.

© Copyright 2009 McMillan LLP

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions