Opinion ID: 410287
Heading Depth: 2
Heading Rank: 2

Heading: Location of Signs.

Text: 17 The binder option also requires a seller to provide notice of the availability of the binders by placing signs reasonably calculated to elicit the prospective buyer's attention in prominent locations in the store or department .... 16 C.F.R. Sec. 702.3(a)(1)(ii)(B). The ALJ focused on the reasonably calculated language and concluded that signs are required in reasonable proximity to the point of sale. 18 The ALJ based his proximity conclusion on an analysis of the other three compliance options. He noted that all three have some explicit proximity or point of sale requirement. See footnote 2, supra. He concluded, therefore, that the reasonably calculated language, when read in the context of the other options, means that the signs must be in sufficient proximity to the point of sale so that buyers are likely to see such notice before making their purchases. The ALJ's order requires Wards to place signs on all cash registers in departments selling goods covered by the rule. He reasoned that signs in such prominent locations at the point of sale would be an excellent way to elicit the prospective buyer's attention. 19 The FTC argued that the signs should be near the products, as opposed to the point of sale. The ALJ rejected that approach, noting that the purpose of the rule is to make warranty terms available prior to the sale. He concluded that the rule makes no requirement that the signs or binders be visible to the prospective buyer during examination of the product. 20 The Commission rejected the ALJ's analysis, with the observation that by the time a customer approaches the cash register, the purchasing decision usually already has been made; thus the notification is no longer pre-sale, and the purpose of the rule is not accomplished. The Commission ordered that, if Wards put one set of binders on each floor rather than in each department, it must place signs in a prominent location in each department of each retail establishment where warranted products are sold, in a manner reasonably calculated to elicit the prospective buyer's attention. If two adjacent departments share a wall, one sign may be placed on that wall. (Emphasis added). 7 III