Formation of consumers savings group

No. 277. Formation of consumers savings group. The Commission was requested to render an advisory opinion as to the legality of a proposed method of organizing and operating a consumers savings group. Under the facts as presented , certain select merchants in a town would agree to give designated cash savings to the members of the group upon the purchase of merchandise for cash, which would be a percentage of the purchase price. This savings would not be paid directly to the consumer at the time of purchase but would be remitted to the group and held in reserve to be disbursed on a cyclical basis. The group would retain no portion of the member s savings, but would earn its profits solely from the fee charged for the consumer s membership in the group and from interest earned on the funds while they were being held for the consumers.

The Commission advised that it could see no objection to the operation of the gTOUp in the manner stated provided the purchase prices to be charged the consumer on which his percentage savings were to be computed were in fact the retailers ' own former prices for the articles sold within the meaning of Guide I of the Guides Against Deceptive Pricing. In the Commission view, the entire proposal was based on an assurance to consumers that they would save a stated percentage of the purchase prices actually paid and that those prices would be the regular prices customarily charged by the retailers or the prices at which the articles were openly and actively offered for sale in good faith for a reasonably substantial period of time in the recent , regular course of business. (File No. 6837143, released Aug. 23, 1968.