Assemblyman John Burzichelli

BURZICHELLI BILL TO GIVE CONSUMERS
'ON-THE-SPOT' REBATES PASSES COMMITTEE
Legislation Would Make N.J. Third State to Require Stores
To Charge Advertised 'After-Rebate' Prices

(TRENTON) -- The Assembly Consumer Affairs Committee today released legislation Assemblyman John Burzichelli sponsored to require retailers to charge consumers an advertised “after-rebate� price at the time of purchase, rather than making buyers send in coupons or log-on to manufacturer’s Web sites to claim their savings -- a process that can often take months."Customers should not be deceptively lured into stores by low prices that only exist after they take the product home, fill out aggravating paperwork, and then wait months for a check," said Burzichelli (D-Gloucester). "Retailers who want to advertise a 'post-rebate' price as the actual cost to the consumer should be the ones who have to jump through hoops to claim a money-back offer."

The measure (A-3539/2967) also is sponsored by Assemblymen Neil Cohen (D-Union), Peter Biondi (R-Somerset), and Paul Moriarty (D-Gloucester).

Under the legislation, retailers that advertise a product’s "net price" -- the price after a manufacturer's rebate is applied -- would be required to charge that price at the time of sale. It then would be a retailer's responsibility to complete the rebate redemption process.

New Jersey would become the third state to enforce such a consumer protection if the bill were to become law, following Rhode Island and Connecticut.

Violations of the measure would be punishable under the state’s consumer fraud act, with fines of up to $10,000 for a first offense. Repeat offenses could be punished by up to $20,000 in fines, as well as injunctive relief, triple damages, and restitution.

Burzichelli said the measure would not prevent manufacturers from offering rebates to New Jersey consumers, but would only prohibit stores from deceptively passing off a net price to unwitting customers.

"Something is wrong when it becomes the customer's job to take extra steps to be able to pay a price a retailer boldly advertised," said Burzichelli. "This is money that should be left in consumers' pockets at the time of sale."

According to research conducted by Vericours, Inc., a corporate consulting firm, approximately 40 percent of manufacturer rebates are never redeemed, costing consumers more than $2 billion annually. The company also estimated that unredeemed rebates have saved computer manufacturers $10 billion.

The Better Business Bureau reports that consumer complaints over rebates -- including burdensome rebate-claiming processes and promised rebate checks that never materialized -- increased to 2,715 in 2005, a nearly three-fold jump over the past five years.

"Applying for a rebate has become a confusing, complicated, and drawn-out process, requiring consumers to navigate an increasing amount of fine print just to realize a price they should have been charged at the store counter," said Burzichelli. "It all comes down to a simple premise: The price that is advertised should be the price that consumers pay."

The measure was released 5-0. It now heads to the Assembly Speaker, who decides if and when to post it for a floor vote.

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For Release:
January 18, 2006

Assemblyman Burzichelli
(856) 251-9801