Gino DiCaro

CMTA pushing for veto for rebate mandate bill

By Gino DiCaro, VP, Communications

Capitol Update, Oct. 4, 2007 Share this on FacebookTweet thisEmail this to a friend

On September 28th, CMTA led a coalition of opponents in a meeting with the Governor's staff to argue for a veto of AB 1673 (Mike Feuer, D-Los Angeles), which mandates that certain manufacturer's rebates be treated as on-the-spot cash reductions for products, rather than the traditional system which offers a consumer a price reduction in exchange for meeting some reasonable conditions offered by a manufacturer - the very premise of such rebates.

Attending the meeting arranged by CMTA were the following opponents: the California Retailers' Association, the CalChamber, the California Grocers' Association, the Wine Institute, and representatives from CTIA - the Wireless Association. The meeting was productive and provided an opportunity for a wide range of industry concerns to be presented, including how the bill would have the impact of micro-managing industry business models by forcing changes in national rebate advertising campaigns in order for a manufacturer or retailer to continue to offer traditional mail-in rebates.

Specifically, the bill requires a California retail seller that indicates the availability of a rebate for an item of merchandise by displaying or advertising the net price, to offer that price immediately at the point of purchase.

National manufacturers and companies making nationwide rebate offers, sometimes on the Internet, could have conflicts with this bill on a state-by-state basis.  It would certainly require altering national advertising campaigns. It would increase prices for consumers as companies (small and medium manufacturers in particular) seek to recoup the cost of state-by-state compliance. The end result of the legislation could encourage companies to drastically diminish offered rebates to consumers, harming competition and consumers in California.

While new civil penalties were removed from the bill late in the legislative year, the underlying policy proposal to further dictate, and thereby limit, the way in which a manufacturer or retailer may advertise and offer rebates still exists. It remains unclear what problem this legislation is seeking to address, as proper disclosure of reasonable mail-in rebate terms before purchase, as required by existing California law, provides the best solution to assist consumers in California.

CMTA will continue to advocate for a veto of this legislation.

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