Current through Register Vol. 63, No. 9, September 1, 2024
(1) Purpose:
It is the purpose of this rule to declare as an unlawful trade practice certain
representations relating to price reductions.
(2) Scope: At present, it is unlawful under
ORS 646.608(1)(j)
to make "false or misleading representations of fact concerning the reasons
for, existence of, or amounts of price reductions." This rule is intended to
define types of price comparisons which are in violation of that section, by
establishing permissible types of reference price advertising. The rule does
not address misrepresentations regarding the "reasons for" price reductions.
The Examples provided in this rule are for illustrative purposes
only.
(3) Authority: This rule is
adopted pursuant to ORS Chapter 183 on authority granted to the Attorney
General by ORS 646.608(1)(s) and
(4).
(4) Effective Date: This rule applies to all
advertisements (other than catalogues) printed, distributed, or broadcast, or
offers for sale made, after September 1, 1976. Subsection (6)(e) of this rule
applies to all catalogues distributed in Oregon after January 1,
1977.
(5) Definitions: As used in
this rule:
(a) The definitions of terms set
forth in ORS 646.605(1975)
are applicable;
(b) "Catalogue"
means a multi-page solicitation in which a person offers more than one specific
type of goods for sale from which a consumer can order goods directly without
going to the seller's place of business, and which is distributed to consumers
by means other than by inclusion in a newspaper;
(c) "Competitor" means a retail outlet in the
person's geographic market area with whom the person in fact competes for
sales;
(d) "Offering Price" means
the price at which a person represents that goods will be sold or leased,
whether stated as a definite sum of money or as a determinate reduction from a
reference price;
(e) "Reference
Price" means any price, whether stated in dollars, in terms of a percentage or
faction, or by any other method, to which a person compares the currently
represented offering price of its own goods. Examples of "reference prices"
include manufacturer's suggested list or suggested retail prices; a
competitor's offering price for the same or similar goods; a price at which the
person formerly offered for sale or sold the same or similar goods; and an
unspecified price at which the person formerly offered for sale or sold the
same or similar goods suggested by the use of terms such as "on sale," "reduced
to," "________% off," or the like;
(f) "Readily Ascertainable Reference Price"
means a reference price which is capable of being determined, from a stated
offering price, by means of a simple arithmetic computation;
(g) "Similar Goods" mean goods associated
with a reference price which are similar in each significant aspect, including
size, grade, quality, quantity, ingredients, utility and operating
characteristics, to the offered goods.
(6) Unfair or Deceptive Use of Reference
Prices: A person engages in conduct which unfair or deceptive in trade or
commerce when it represents that goods are available for sale or lease by it at
an offering price less than a reference price unless such
reference price comes within any one of the following exceptions:
(a) The reference price is stated or readily
ascertainable, and is a price at which the person, in the regular course of its
business, made good faith sales of the same or similar goods or, if no sales
were made, offered in good faith to make sales of the same or similar goods,
either:
(A) Within the preceding 30 days;
or
(B) At any other time in the
past which is identified.
EXAMPLE: This exception is intended to identify
the most common price comparison -- to a former price charged by the seller
himself. The former price must be one which was used in good faith to make or
offer to make sales. Good faith is absent if the person raises his price for
the purpose of subsequently claiming reductions. Comparisons to "a" legitimate
former price are allowed. Thus, if a chain store reduces its price in one or
two outlets to meet localized competition, its price throughout the rest of the
chain can be used as a reference price. Seasonal comparisons from year-to-year
are also permitted.
(b) The reference price is the price at which
the person will offer the same or similar goods for sale in the future,
provided that:
(A) The reference price is
stated or readily ascertainable; and
(B) If the reference price will not be put
into effect for more than 90 days after the representation, the effective date
of the reference price is stated; and
(C) Such reference price is actually put into
effect for the purpose of offering in good faith to make sales.
EXAMPLE: This exception permits introductory
offering prices and the like.
(c) The reference price is stated or readily
ascertainable, and is a price at which an identified or identifiable competitor
is or has in the recent regular course of its business offered to make good
faith sales of the same or similar goods.
EXAMPLE: A person may rely upon the recent
advertised price of a competitor for the same or similar goods, if he
reasonably believes the competitor was attempting to make sales at that price.
Alternatively, a person can "shop" his competitor to determine the latter's
recent offering price.
(d)
The reference price is stated or readily ascertainable, and is required by
federal or Oregon law to be affixed to the goods, and clear disclosure is made
in the same representation that all sales of such goods are not necessarily
made at such reference price, if such is in fact the case.
EXAMPLE: This rule is directed at claimed price
reductions from the "sticker prices" of automobiles. If a person makes such a
price comparison and in fact similar automobiles are sold at less than the
"sticker price," that fact must be disclosed clearly in the same
representation.
(e) The
reference price is stated in a catalogue, so long as the person employing such
reference price includes a statement, printed in a manner which a reader of the
catalogue is likely to notice, explaining:
(A) The source of the reference price;
and
(B) That the reference prices
may not continue to be in effect during the entire life of the catalogue, if
such is in fact the case. The requirements of this section are satisfied by a
single disclosure statement, which applies to the catalogue as a whole, made in
conjunction with the explanation to the reader of how to make a purchase from
the catalogue.
(f) The
reference price is stated and is a price, such as a manufacturer's list price,
which the person can document as having been employed in good faith offers to
sell the same or similar goods within his market area during the preceding 30
days.
EXAMPLE: Comparing one's current offering price to
a manufacturer's list price is valid if the offerer can substantiate that goods
have been offered or sold, in good faith, at that list price during the
preceding 30 days.
(g)
Notwithstanding subsections (6)(a) through (f) of this rule, a person may
represent a general price reduction on a variety of merchandise without using a
stated or readily ascertainable reference price, so long as:
(A) The amount of reduction is stated
expressly, either in terms of a dollar amount or a percentage;
(B) The reduction is from a price or prices
at which the person made good faith sales of the same or similar goods at a
time in the past which is identified; and
(C) The represented reduction is true as to
each item offered for sale.
EXAMPLE: This would permit advertising seasonal
clearance sales and the like by means of a general representation as to price
reductions, without stating specifically either the reference price or the
offering price.
Stat. Auth.: ORS 646
Stats. Implemented: ORS
646.608(1)(u)
