For many retailers and manufacturers hoping to boost product sales, consumer rebates can be an effective marketing vehicle. However, depending on the breadth of a given marketing initiative, state and federal rebate laws, rules and regulations can restrict the manner in which the rebate should be marketed and processed. As such, before launching a consumer rebate campaign, marketers should consider at least these four points:
1) Set reasonable timeframes.
States laws vary on how quickly companies offering rebates ("offerors") must honor consumers' rebate requests. In New York and North Carolina, for example, all rebates must be processed (and when applicable, mailed to consumers) within 60 days of receipt of a completed redemption form.
Relatedly, consumers should be given a reasonable timeframe to submit their rebate requests: North Carolina requires that rebate offerors give consumers at least 30 days after purchase to submit completed redemption forms.
2) Make sure the price is right.
A number of state laws place restrictions on rebate pricing advertising. Several states, including California, New York and Oklahoma, require that rebate offers clearly and conspicuously state the actual (pre-rebate) price of the subject products or services. Connecticut and Rhode Island take it a step further and forbid offerors from displaying the discounted (post-rebate) price at all.
3) Rebate laws dictate that you be flexible with consumers.
Overly strict rebate redemption requirements can create problems for marketers. Companies that offer rebates in Rhode Island, for example, must accept photocopies or other reasonable copies of receipts from consumers as proof of purchase. In Texas, offerors who receive an incomplete rebate form must contact the consumer and provide him or her with an opportunity to correct the deficiency, or else honor the rebate form as-is.
4) Make rebate forms accessible.
Once a rebate offer is made, redemption forms should be made readily available to consumers. In both Maine and New York, rebate forms must be provided at the time of purchase. Similarly, when products are sold online with an advertised rebate, New York requires retailers to provide hyperlinks to the rebate form on the purchase page.
On a federal level, the Federal Trade Commission ("FTC") has suggested that displaying the terms of an online rebate offer on a separate, hyperlinked page, and allowing consumers to purchase the product without actually viewing the terms, may amount to a deceptive business practice in and of itself.
Be Careful
Marketers offering mail-in and instant rebates to consumers can be overwhelmed by a tangled web of state and federal laws and regulations. As such, it is critical that marketers remain abreast of ever-evolving regulations in the consumer rebate space, or risk substantial liability.
If you are a retailer, manufacturer or marketer offering consumer rebates, or if you have been served with legal process relating to your marketing practices, please e-mail us at info@kleinmoynihan.com or call us at (212) 246-0900.
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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
