Since the 70 percent rule is not a statute, but is merely a concept to be evaluated by the courts, whether it is the right 70 percent rule or the wrong 70 percent rule is often the result of the interpretation of an individual case. Suffice it to say, that most knowledgeable observers would accept the concept of the 70 percent rule as the rule which requires that distributors have sold or used for personal or family use product which has been previously purchased. If you keep in mind, the underlying policy to prevent front-end loading, inventory loading or sales of inventory that are not in commercially reasonable quantities, then this approach is a very fair approach. Enforcing the 70 Percent Rule. Companies are all over the board in the way they implement their 70 percent rule.
Some companies demand sales receipts.
Some companies merely place a statement of policy in their rules and regulations manual. Many companies ask distributors to certify on product order forms or at the time of ordering that they are in compliance with the company's 70 percent rule. Some companies, however, have been mandated as a result of consent decrees with various enforcement agencies to specifically monitor distributors for compliance with the 70 percent rule, as well as verify with their customers that the product has in fact been sold. Again, since this rule is not to be found in a statute, there is not necessarily a right or a wrong. Probably the certification approach at the time of ordering is the fairest to all parties.