- A. It is a deceptive act or practice for a seller to use terms such as "sale", "sale prices", "now only $ ____", or other words and phrases that imply a price savings unless the price of the merchandise is reduced by a reasonable amount from the former price of the merchandise. If the seller reduces the price by 5 percent or more from the former price, a rebuttable presumption exists that the price reduction was of a reasonable amount. However, the term "sale" may be used in an advertisement where not all items are offered at a reduction from regular price if the items are clearly and conspicuously identified.
B. You may not advertise a "sale" or use words that mean the same thing unless you have made reasonable reductions from the regular selling price of your sale merchandise. What is a reasonable reduction will depend on the profit margins typical in your industry.
- 1. The rule provides that a reduction of 5 percent is to be considered reasonable unless we can prove otherwise.
If you advertise a sale based on price reductions of less than 5 percent, you will need to show why a smaller reduction is reasonable in your case. - 2. Of course, these reductions must be based on authentic regular prices and not phony ones. You may also have a sale that doesn't include all of the goods in your store, but only if you make that limitation clear in your ad.
Example:
| TV and VCR SALE! |
|---|
| 10% Off All TV's! Special Group of VCR's 20% Off! |
| Other merchandise at regular prices |
3. This ad complies with the rule as long as:
- a. all television sets are available at 10 percent off;
- b. a reasonable number of VCR's are available at
20 percent off; and - c. both discounts are based on the actual regular selling prices.
Note that the ad makes it clear that only the TVs and VCRs are on sale.
Authority Note
AUTHORITY NOTE: Promulgated in accordance with R.S. 51.1 et seq.
Historical Note
HISTORICAL NOTE: Promulgated by the Department of Justice, Office of the Attorney General, LR 21:36 (January 1995).