BILL ANALYSIS
SB 1154
Page 1
SENATE THIRD READING
SB 1154 (Figueroa)
As Amended June 24, 2004
Majority vote
SENATE VOTE :24-13
BUSINESS AND PROFESSIONS 9-3
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|Ayes:|Correa, Bermudez, | | |
| |Corbett, Koretz, Leno, | | |
| |Nation, Negrete McLeod, | | |
| |Vargas, Yee | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Shirley Horton, | | |
| |Aghazarian, Maze | | |
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SUMMARY : Regulates the offering and fulfillment of rebates for
consumer products, including requirements that consumers have a
minimum of 30 days to submit a rebate request and companies have
a maximum of 60 days to deliver the rebate, as well as
restrictions on what evidence and personal information a company
may require the consumer to provide. Specifically, this bill :
1)Requires a company offering rebates to allow a minimum of 30
days from the eligibility date for the consumer to submit the
rebate request.
2)Requires a company to mail the rebate check or otherwise
fulfill the terms of the offer no later than the same number
of days provided to consumers to submit their rebate request,
and no later than 60 days in any event, after either of the
following:
a) Upon receipt of a valid request; or,
b) Upon completion by the customer of the required minimum
service period and the receipt of a valid request.
3)Prohibits a company from requiring a consumer to provide more
than all of the following as a proof of purchase for a
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consumer rebate: a receipt, any universal product code or
other packaging element, and the consumer's name, address,
telephone number, membership number, and signature.
4)Prohibits a company offering a rebate from requiring any
personal information other than the consumer's name, address,
telephone number, membership number, and signature. A company
would be permitted to require an email address rather than a
telephone number if the product was purchased over the
Internet.
5)Requires a company to provide the rebate redemption form
directly with the product, and at the same time and location
as the purchase. Companies providing rebates must provide
retailers with sufficient quantities of rebate forms or a
means to create them. In the case of Internet sales, a
generally accessible Web page may be used to provide the form.
In the case of telephone sales, a generally accessible Web
page may be used to comply, as can a form sent, upon request,
via regular mail, electronic mail, or telecopy.
6)Requires a company to accept a copy of a receipt as sufficient
unless the consumer is provided with a duplicate original
receipt.
7)Permits a company to require a consumer to write the model
number or other identifying information on the rebate form
only if the receipt does not provide that information.
8)Requires a rebate offer to conspicuously disclose a telephone
number on the rebate form so that a consumer can check on the
status of his or her rebate request.
9)Permits companies to use a Web site or other electronic means
to provide consumers with a means to check the status of his
or her rebate if the product was purchased over a Web site
operated by the company.
10)Exempts from the provisions of this bill certain rebates
offered by gas or electric corporations, or local
publicly-owned electric utilities.
11)Declares that this bill shall become operative on July 1,
2005.
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12)Declares that this bill shall not impose any obligation to
recall any product or service shipped prior to the operative
date. Any rebate offer in effect prior to the operative date
shall be deemed in compliance.
13)Defines the term "consumer rebate."
EXISTING LAW : States that there are no state or federal laws
that specifically address consumer rebates. However, the
California Unfair Practices Act prohibits unfair competition,
which is defined in part as any unlawful, unfair or fraudulent
business act or practice and unfair, deceptive, untrue or
misleading advertising.
The Federal Trade Commission Act has been used by the Federal
Trade Commission (FTC) to take action against the mail-in rebate
industry. Title 15, United States Code, Section 45, prohibits
unfair methods of competition and unfair or deceptive acts or
practices in or affecting commerce, and FTC has used this law in
the past, for example, to take action against companies that
failed to deliver rebates within the time specified by the
rebate offer.
FISCAL EFFECT : Unknown. This bill is keyed non-fiscal.
COMMENTS : Purpose of this bill: This bill is intended to
regulate the use of rebates for consumer products so that
consumers can send rebate requests and receive their checks
within a reasonable amount time and without unnecessary
requirements for documentation or personal information. This
bill is sponsored by the Consumers Union. In general, this bill
would enact a number of protections for consumers requesting a
product rebate, including: a minimum of 30 days for a consumer
to request a rebate and an equal amount of time (not to exceed
60 days) for the company to send it; restrictions on the
evidence and personal information a company can require a
consumer to submit; a requirement for the disclosure of a
contact point (telephone or electronic) to check the status of a
rebate; and a requirement that rebate forms be provided with the
product at the time of purchase. In order to make these new
requirements practicable for the companies, rebate offers and
products shipped before the operative date of July 1, 2005 are
exempted.
Arguments in support. According to the author, "SB 1154 sets
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reasonable timelines for consumers to submit rebate requests and
for companies to make good on their offers. SB 1154 will also
standardize and simplify the process by limiting the information
that a company can require on a rebate form." Consumers Union
argues that "[w]hen a consumer purchases a product that includes
a rebate offer, the consumer expects to receive the rebate in a
timely manner without an unreasonable amount of hassle. SB 1154
attempts to ensure that these consumer expectations are met."
Arguments in opposition. Because of recent and proposed
amendments, the current status of most opponents is unknown.
However, opponents have previously offered a number of arguments
against the bill, including arguments that this bill: may be
unnecessary because of existing contract laws and federal and
state consumer protection laws; may restrict the ability of
companies to contract with consumers when making rebate offers;
and may unduly burden nationwide rebate programs, noting that
state-specific legislation might cause conflicts for companies
among the various states and leading to the exclusion of
California from rebate offers.
Recent and proposed amendments. This bill was recently amended
as a result of lengthy discussions between the author, sponsor,
and opponents. The sponsor notes that "SB 1154 has been
significantly amended at the request of many businesses. These
amendments address the legitimate workability concerns voiced by
businesses without compromising the integrity of the
legislation."
Analysis Prepared by : Hank Dempsey / B. & P. / (916) 319-3301
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