Gino DiCaro

Rebate Bill Problematic for Manufacturers

By Gino DiCaro, VP, Communications

Capitol Update, April 9, 2004 Share this on FacebookTweet thisEmail this to a friend

SB 1154 by Senator Liz Figueroa (D-Freemont) seeks to impose a number of requirements on companies and retailers that offer consumer rebates. Among the most problematic aspects of the proposal are the following mandates:

* The company must mail the rebate check within 30 days of receiving the rebate request.
* The company must allow a consumer at least 60 days from the time of purchase to submit the rebate request.

SB 1154 would have the undesirable effect of reducing the number of rebates offered by companies. For most companies selling directly to consumers via retailers, rebates provide a means whereby such companies can directly provide discounts and benefits to consumers. The short 30-day check mailing period required by SB 1154 would increase administrative costs of outside "fulfillment vendors" and therefore lead to fewer rebate offers.

If enacted, SB 1154 would also greatly increase a company's exposure to fraud, as the bill would strictly limit the consumer's proof of purchase to a copy of the receipt. This invites fraud because an original receipt can be easily duplicated by modern imaging products. CMTA will be suggesting that a unique identifier of purchase (such as UPC code or unique serial number) is essential in order to limit rebate submissions to actual purchasers of products and thus reasonably reduce a company's fraud exposure.

The proposed requirement that all rebate checks be mailed within 30 days also increases the chances of fraud. Many retailers have consumer friendly policies that permit the return of products 30 or more days after purchase. The short 30 day requirement would enable individuals to receive rebate checks and then fraudulently return products.

Finally, companies most often make nation-wide rebate offers and promote them on the Internet. The proposed restrictions in SB 1154 could cause conflicts for companies among the various states. The end result of the legislation could encourage companies to exclude California from rebate offers, harming competition and consumers in California.

CMTA will oppose this bill. If you are impacted by this bill and have additional concerns or objections, please share those with Matt Sutton at msutton@cmta.net
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