NYS Consumer Protection Board Applauds Enactment of Rebate Law

New Law Will Provide Consumers With Enhanced Disclosure About Rebate Offers

ALBANY, NY (08/04/2010)(readMedia)-- The New York State Consumer Protection Board (CPB) hails the enactment of a new law that will provide consumers with important information about rebate offers made by manufacturers and retailers.

"Consumers should not be misled by rebate offers which fail to disclose that they have to purchase an additional product before they see any savings," said Governor Paterson. "The new law will enhance the transparency of rebate offers, and help ensure that rebates remain an equitable and vital part of the marketplace for both consumers and businesses."

"Consumers are entitled to know the terms of a rebate before they decide whether to purchase a product," said Mindy A. Bockstein, the CPB's Chairperson and Executive Director. "This measure will ensure that consumers receive the information they need to make an informed marketplace decision. They will now reap the benefits of knowing what form their rebate will take before they make a purchase. The law will also provide clear guidance to businesses that use rebates to bolster customer relationships and loyalty. I applaud the Governor and the Legislature for enacting this law."

In recent years, rebate offers have become an increasingly popular method for businesses to attract customers, who appreciate the opportunity to save money on items they wish to purchase, and tend to respond favorably when rebates are offered on such products.

However, manufacturers and retailers, which offer rebates, do not always make the terms of the rebate clear to consumers at the point of sale. While consumers tend to assume that a rebate will be in the form of a check, some rebates are actually provided in the form of a credit toward the purchase of another product. If the rebate is provided in the form of a pre-paid card to make the additional purchase, consumers can face undisclosed fees for activation, checking of balances, and account maintenance for periods of inactivity.

The new statute, proposed by the CPB and sponsored by Senator José Peralta and Assemblywoman Audrey I. Pheffer, requires any entity that offers rebates to conspicuously disclose to consumers (i) if the rebate will be issued 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.

The measure also requires 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.

Assemblywoman Audrey I. Pheffer, Chairperson of the Assembly Committee on Consumer Affairs and Protection, said: "Consumers enjoy the opportunity to save money with rebates and they are a legitimate marketing tool for many businesses. It is important that we ensure consumers are aware of all additional conditions that apply to rebates. This legislation provides a clear outline of how rebates must be offered."

Senator José Peralta, Chairperson of the Senate Committee on Consumer Protection, said: "The rebate bill will protect consumers from any potential bait and switch scams. Consumers have the right to know the terms and conditions of rebates that are being offered, especially when the rebate is determining factor in their purchase. As the Chair of the Consumer Protection Committee, I will continue to work with my colleagues to make sure that we expose all of the fine print and continue to protect consumers from misleading offers and in many cases blatant scams."

The new rebate law will take effect on January 1, 2011.

For more information about rebates offers and other consumer topics, visit www.nysconsumer.gov or call the CPB toll-free at 1-800-697-1220.

The CPB, established in 1970 by the New York State Legislature, is marking its 40th anniversary as the State's top consumer watchdog and think tank. The CPB's core mission is to protect New Yorkers by publicizing unscrupulous and questionable business practices and product recalls; conducting investigations and hearings; enforcing the "Do Not Call" law; researching issues; developing legislation; creating consumer education programs and materials; responding to individual marketplace complaints by securing voluntary agreements; and, representing the interests of consumers before the Public Service Commission and other State and federal agencies.

- 30 -

To file a consumer complaint with the NYS Consumer Protection Board (CPB), call our toll-free hotline at 800-697-1220 or visit the CPB's website at www.nysconsumer.gov. In addition to the online complaint form, the website is home to important consumer safety information