Companies doing business in California must now complete a comprehensive “survey” if selling particular products to consumers within the state. However, this is not your typical consumer satisfaction survey, but rather a submission of detailed information for each product meeting the requirements discussed below. The detailed submission must include include information on product formulas and
While many focus important questions such as whether or not to brine the turkey and whether to cook the stuffing inside or outside of the bird, many of our clients focus on bigger issues of whether the holiday sales season will put the company in the red or the black. What used to be just a push for Black Friday, and then extended to include Cyber Monday, now includes pre-Black Friday and specials through December. In this busy shopping season, retailers are trying to drive traffic, sell merchandise, and clear out winter inventory in anticipation of the coming year. Shoppers are looking for a bargain and that perfect gift. Sunday papers, email inboxes, and television commercials all boldly proclaim the greatest sales of the year, and consumers definitely take notice. With fast moving inventory and quickly changing stock levels, there are times when a retailer might run out of certain items. Retailers in this position need to pay careful attention to consumer protection laws.
In 2011, as part of its systematic review of all of the agency’s rules and guides, the FTC opened a public note and comment period for the Retail Food Store Advertising and Marketing Practices Rule, better known as the “Unavailability Rule,” to consider whether the rule should be expanded to cover other retailers. On November 19, 2014, the Commission decided to keep the Rule unchanged. This means that the Unavailability Rule still only applies to retail food stores. Still, other retailers would be wise to take this Rule’s guidance to heart.
Continue Reading The Unavailability Rule: After the Turkey and Stuffing, Avoiding the Bait-and-Switch?
It is almost football season and the FTC tries to stay seasonal; around this time in 2012, it announced a settlement with football mouthguard manufacturer Brain-Pad regarding unsubstantiated concussion prevention claims. Subsequently, the FTC has sent warning letters to other manufacturers of sporting equipment regarding concussion prevention claims. This year, however, the FTC has called a different play. On August 21, the FTC announced that it had sent warning letters to five major retailers regarding the FTC’s concerns regarding concussion protection claims for athletic mouthguards made on the retailers’ websites. These retailers appear to have been repeating claims that the manufacturers of the products made on their packaging.
Continue Reading FTC’s Letters to Retailers Regarding Concussion-Related Products Has Us Scratching Our Heads
You feel pretty good heading to work wearing that designer outfit you picked up at a bargain price over the weekend at the local outlet center. But what if that deal you got wasn’t a deal at all? Questions have increasingly been raised about the potentially deceptive marketing practices related to the quality and source of products sold by fashion retailers in their outlets or factory stores. Further, concerns over outlet pricing is not only an American problem. This past month, the British tabloid Daily Mail conducted its own investigation into outlet retailer practices in England, warning consumers to beware of lower quality merchandise manufactured purely for outlet stores.
Back in the day, outlet stores were a place where manufacturers could sell discontinued products or inventory left over from last season. However, outlet stores are now big business, growing from an estimated $12 billion in 1997 to $25 billion this year. Increasingly, national clothing retailers are creating separate, lower-quality product lines to be sold exclusively though their outlets.
This issue has caught the attention of some federal lawmakers. Earlier this year, four members of Congress called upon the FTC to investigate potentially misleading marketing practices by outlet retailers. In their letter, the members of Congress noted that they did not take issue with the potentially lower quality of the outlet merchandise. Nor does it seem should they; after all, many consumers may be more than willing to purchase lower-quality brand-name merchandise at a steep discount. Instead, the senators voiced concerns about the potential for outlet shoppers to be misled about whether the outlet product lines were ever sold (or intended for sale) at a regular retail store, and whether the products were ever sold at the advertised “retail price” used as reference pricing at the outlet stores. (Reference pricing, in case you’ve actually never been to an outlet store, occurs when a product’s “retail price” or “list price” is advertised next to the discounted outlet price.) The letter inquires whether outlet store reference pricing is deceptive when “made for outlet store” merchandise has never been sold at regular retail locations—making the “retail price” impossible to substantiate.