Oregon Administrative Rules › Chapter 137 - DEPARTMENT OF JUSTICE › Division 20 - MISLEADING PRICE REPRESENTATIONS › Section 137-020-0015 - Misleading Use of "Free" Offers and Rebates

Current through Register Vol. 63, No. 7, July 1, 2024
(1) Definitions: As used in this rule:
(a) The definitions of terms set forth in ORS
			 646.605 and OAR 137-020-0020  are
			 applicable;
(b) "Free" means
			 without charge or cost, monetary or otherwise, to the recipient and includes
			 terms of essentially identical import, such as "at no additional cost,"
			 "1¢ sale," "2 for the price of 1" and "give away" and, in the case of real
			 estate, goods or services described in subsection (2)(a), an offer of any
			 combination of real estate, goods or services at a single price. A free offer
			 in conjunction with the sale or lease of real estate, goods or services is one
			 that conveys to consumers the message that real estate, goods, services, gift
			 certificates, gift cards, cash cards, or any other things of value, are offered
			 at no cost in conjunction with the purchase of other real estate, goods or
			 services for no more than their regular price;
OFFICIAL COMMENTARY
: Offers may be subject to this
				rule even if they do not specifically use the word "free." Any time an
				advertisement or solicitation is made that gives anything of value away in
				conjunction with the sale or lease of real estate, goods or services, the
				person making the offer should carefully analyze the offer to ensure compliance
				with this rule.
Use of the term "included in the price" may be considered a
				"free" offer depending upon the terms and conditions of the offer, including,
				but not limited to, if the real estate, goods or services that are "included in
				the price" are usually and customarily included with the sale of similar real
				estate, goods or services. A merchant may not force a consumer to unknowingly
				purchase other goods and services simply by listing them as "included in the
				price." Conversely, it is not unlawful to sell a product with an accessory
				included in the price, particularly if the price of the accessory is
				individually disclosed and a consumer knows (s)he is paying an additional
				amount for the accessory.There is no bright line on this issue and each offer
				will be evaluated in its entirety to determine if the combination of real
				estate, goods or services is a legitimate "free" offer. All factors will be
				taken into consideration, including, but not limited to, whether the consumer
				could purchase a similar product without the additional purchase of other goods
				and services or if the free item is of de minimis value, such as batteries in a
				toy or flashlight.
(c)
			 "Real estate, goods or services" has the meaning given that term in ORS
			 646.605(6). For
			 the purpose of this rule, it does not include loans made by a financial
			 institution or the opening of an account that is subject to the federal Truth
			 in Savings Act of 1991,
			 12 U.S.C.
			 4301 et seq., and implementing regulations
			 issued by the Federal Reserve Board or the National Credit Union
			 Administration, including, but not limited to, a savings or checking account,
			 money market account, share certificate or certificate of deposit;
(d) "Rebate" means the return of any part of
			 a payment made by a consumer in conjunction with the sale or lease of real
			 estate, goods or services and includes, but is not limited to, an offer of a
			 future cash refund, a direct or indirect payment of money to a consumer or a
			 voucher for a future payment;
(e)
			 "Regular Price" means the price, in the same quantity, quality and with the
			 same service, at which the seller or advertiser of the product or service has
			 openly and actively sold or leased the product or service in Oregon in the most
			 recent and regular course of business, for a reasonably substantial period of
			 time, i.e. a 30-day period, prior to the offer. For consumer products or
			 services which fluctuate in price, if the price change was due to changes in
			 the cost of the goods or services by the supplier or the price change is due to
			 price reductions inherent in the pricing of seasonal or perishable goods, the
			 "regular price" shall be the lowest price at which substantial sales were made
			 during a reasonably substantial period of time. Except in the case of
			 introductory offers, if no substantial sales were made, in fact, at the
			 "regular price," the price will be presumed to be arrived at through bargaining
			 with potential purchasers; and
(f)
			 "Verifiable retail value" means:
(A) A price
			 at which an offeror can demonstrate that a substantial number of free items
			 have been sold at retail in Oregon by a person other than the offeror;
			 or
(B) If substantiation described
			 in this section is not available to an offeror, no more than one and one-half
			 times the amount an offeror paid for a free item.
OFFICIAL COMMENTARY:
If substantiation of
				verifiable retail value, as required by paragraph (2)(b)(C), is not available,
				and the offeror pays $10 for a free item, the verifiable retail value of that
				free item would be $15.