"Rule clean up on Aisle 16!"

You or your clients are in the grocery business and customers are lined up to take advantage of an advertised special. Great news — as long as the stock on hand meets their demand. But if it doesn’t, the FTC’s Retail Food Store Advertising and Marketing Practices Rule — known to its friends as the Unavailability Rule — kicks in. As part of its systematic review of rules and guides, the FTC is taking another look at the Unavailability Rule and wants feedback from the industry, consumers, and others about how the Rule is working.

Under the Unavailability Rule, it’s illegal for retail food stores to advertise products at a stated price if the store doesn’t have them in stock and readily available for customers during the effective period of the ad. The original Rule, which goes back to 1971, said that if retailers ran out, they could defend against a charge of a law violation by maintaining records showing that the advertised item was ordered in time and delivered in quantities sufficient to meet reasonably anticipated demand.

In 1989, the FTC amended the Rule to say that even if stores don’t have the advertised item in stock, they could comply if the ad “clearly and adequately discloses that supplies of the advertised products are limited or the advertised products are available only at some outlets.” In addition, the amendment said it wouldn’t be a violation if the store:

  1. ordered the item in adequate time for delivery in quantities sufficient to meet reasonably anticipated demand;
  2. offers a “raincheck” for the advertised products;
  3. offers a comparable product at the advertised price or at a comparable price reduction; or
  4. offers other compensation at least equal to the advertised value.

From the point of view of businesses and consumers, how’s that working? The FTC is asking a number of specific questions: Should the Rule be repealed? Should it be left unchanged? Should it include drug stores, department stores, and other retailers? The agency also is interested in your general comments. The deadline is October 19, 2011, so jot down your Unavailability Rule “shopping list” and file it online.

And be sure to bookmark the FTC’s new Regulatory Review page to find out when rules and guides that affect your industry will be up for reconsideration.
 

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