Tripartite Promotional Plan Involving Use of “Cents Off” Coupons

No. 411. Tripartite Promotional Plan Involving Use of “Cents Off” Coupons.

The Commission rendered an advisory opinion concerning a tripartite promotional plan involving use of “cents off” coupons redeemable after purchase of certain products sold in retail grocery stores. ADVISORY OPINION DIGESTS 1705 It was proposed that the promotion, designed to ultimately cover a single large metropolitan. trading area, would be operated in a small portion of the area for 80 days and then moved to an adjoming area for another 30 day period until the entire metropolitan area had been covered. The value of each coupon will depend upon the product purchased and will be attached on the shelf where the product is clisplayed. Each package of the promoted product will bear a sticker which the shopper removes and places on the “cents off” coupon as proof of purchase.

Participating manufacturers will pay a fixed fee for each retailer serviced, plus the value of the redeemed coupons, plus 2 cents to be passed on to cooperating retailers for services rendered. Each such supplier will be cautioned to notify his retail customers that the plan is available to them. Notice of the availability of the promotional plan will be made to retailers through wholesale distributors, local trade associations, advertising in the trade press, and through the buying offices of cooperatives and chain stores. In addition, spot checks of retail grocery stores in an intended area will be made by personal contact or telephone to determine whether they have knowledge of the program and that it is available to them.

The Commission expressed the view that implementation of the proposed course of action in the manner described would be unlawful unless (1) the plan is offered to all competing sellers of the supplier’s products regardless of the type of store or location of the seller and (2) the value of the “cents off” coupon is accurately and adequately made known to the prospective purchaser prior to the purchase of the product to which the coupon relates. (File No. 695 7018, released March 20, 1970.)