SCHREIBERSDORF, SAMUEL, ET AL. oe a Be eek aye eee

Text (OCR of the scan at left; may contain errors)

In THE MATTER OF SAMUEL SCHREIBERSDORF ET AL. DOING BUSINESS AS TRAVELLERS LUGGAGE CO.

COMPLAINT, FINDINGS, AND ORDER IN REGARD 10 THE ALLEGED VIOLATION OF SEC. 5 OF AN ACT OF CONGRESS APPROVED SEPT. 26, 1914 Docket 5205. Complaint, Aug. 19, 1944—Decision, Mar. 14, 1947 Where seven partners engaged in the interstate sale and distribution, both at wholesale and at retail, of luggage and other items including golf equipment, brief cases, wallets, ladies’ handbags, umbrellas, and fountain pens; and in issuing and furnishing, in connection with the operation of their retail store, certain “discount cards’? which they caused to be distributed among members of the public, and usually delivered to personnel managers and purchasing agents of large industries and banking concerns located in New York City, for distribution among the latters’ employees, and which set forth, in addition to the partners’ trade name, address, ete. that “The Dearerteio2 LISTED 5 employed by —~-~-----------__ is entitled to a special discount of 40 percent from our list price” ; Represented through said cards that the recipients could, by use thereof, purchase merchandise at prices 40 percent lower than their customary retail prices, “fhe facts being that they marked up the prices on their merchandise in such manner that after the purported discount was allowed, the remaining net prices represented the regular retail prices; With tendency and capacity to mislead and deceive a substantial portion of the purchasing public aware of the recognized wholesaler’s custom of quoting “list” or “catalog” prices which are subject to discount to retailers; with respect to the actual prices and values of their merchandise, and thereby to cause such public to purchase substantial quantities thereof: Held, That such acts and practices, under the circumstances set forth, were all to the prejudice of the public and constituted unfair and deceptive acts and. practices in commerce.

Before Ur. Arthur F. Thomas, trial examiner. Mr. Morton Nesmith for the Commission.

- Mr. Henry W. Fried, of New York City, for respondents. Complaint Pursuant to the provisions of the Federal Trade Commission Act and by virtue of the authority vested in it by said act, the Federal Trade. Commission, having reason to believe that Samuel Schreibersdorf, Louis Schreibersdorf, Julius Schreibersdorf, Sidney Schreibersdorf, Saul Schreibersdorf, Joseph Schreibersdorf, and Bertha Schreibersdorf, trading as Travellers Luggage Co., a copartnership, hereinafter referred to as respondents, have violated the provisions of Complaint 43 F. T. C. said act, and it appearing to the Commission that a proceeding by, it in respect thereof would be in the public interest, hereby issues its complaint, stating its charges in that respect as follows: Paracrapu 1. Respondents Samuel Schreibersdorf, Louis Schreibersdorf, Julius Schreibersdorf, Sidney Schreibersdorf, Saul Schreibersdorf, Joseph Schreibersdorf, and Bertha Schreibersdorf are copartners trading in the name of Travellers Luggage Co., with their principal office and place of business located at 7 Broadway, New York City, New York.

Par. 2. Respondents are now and for several years last past have been engaged in the business of selling and distributing at retail golf equipment, trunks, brief cases, fitted luggage, gladstones, wallets, umbrellas, fountain pens, novelties, and other articles of merchandise. In the course and conduct of their said business, respondents have caused the said products, when sold, to be transported from their aforesaid place of business in the State of New York to purchasers thereof located in various other States of the United States and in the District of Columbia, most of whom do not buy said products for resale or retail.

Respondents maintain, and at all times mentioned herein have maintained, a course of trade in said products in commerce between and among the various States of the United States and in the District of Columbia.

Par. 3. In the course and conduct of their aforesaid business, and for the purpose of inducing the purchase of their merchandise, the respondents have disseminated and now disseminate many false and deceptive statements and representations with respect to the nature and character of their business and the sale prices of their various articles of merchandise. Such statements and representations have been and are being made and disseminated by means of price tags affixed to the merchandise and by “discount cards” and other advertising media periodically issued and distributed to purchasers and prospective purchasers and to their customers and prospective customers, among others, business concerns for their use and for the use of their employees and others, the most of whom buy for their own use or the use of the employees and not for resale. On said price tags, discount cards, and other advertising media featuring said products respondents represent and state the prices of the various articles of merchandise. The discount cards on their face state: TRAVELLERS LUGGAGE CO. O15 als Complaint TRAVELLERS LUGGAGE CO.

7 Broadway New York City Is entitled to a special discount of 40 percent from our list price. and on the back state:

TRAVELLERS LUGGAGE CO.

7 Broadway New York City Golf equipment Trunks Wallets Brief cases Umbrellas Fitted luggage Fountain pens Gladstones Novelties Ladies’ hand bags Par. 4. It has been and is a recognized business custom for whole- ‘salers to publish or quote “list” or “catalog” prices which are subject to discount to retailers, the difference between the net price and the list price or catalog price representing the profit to the retailer with the list or catalog prices being the approximate prices at which the merchandise is expected to be sold at retail. The public is well aware of such long established custom and relies thereon and it has come to - believe that the list or catalog prices are approximately the usual and ordinary retail prices and that any dealings by which any price reduction.is obtained below such list or catalog prices represent and are savings from regular retail prices.

Par. 5. By and through the use of the stated prices with the words “The bearer is entitled to a special discount of 40 percent from our list price,” respondents represent that they are other than retailers and are in fact wholesalers of their merchandise; that the stated prices set out on their price tags and discount cards are the prices at which such merchandise or comparable merchandise is ordinarily sold by retailers and that the differences between the listed prices and the net prices, that is the listed prices less the stated discounts, represent and are savings to purchasers from the customary and usual retail prices. Par. 6. All of the foregoing statements and representations are false, deceptive, and misleading. In truth and in fact respondents are retailers and not wholesalers. Over 90 percent of respondents’ merchandise is sold by them at retail based on fictitious list prices and false discounts of 40 percent. The stated prices or list prices used by respondents are fictitious and substantially in excess of prices at which said merchandise is sold or is expected to be sold at retail. Said Findings 43 F. T. C. prices, after the application of the discounts, are substantially in excess of the prices at which wholesalers or distributors offer for sale and sell the same, or comparable articles of merchandise, and are not the regular prices at which said merchandise is ordinarily and usually sold at wholesale. Respondent’s so-called stated prices or list prices are not prices at all but are arbitrarily fixed amounts which, when reduced by the stated discounts, are approximately the regular and customary retail prices for which the various articles, or comparable articles, are offered for sale and sold by respondents and other retail dealers in the normal and usual course of business. Par. 7. Such false, misleading, and deceptive statements and representations made by respondents, as aforesaid, constitute and are a complete plan and scheme of advertising and price quotation designed to induce the erroneous belief in the prospective and purchasing con- sumer-user public that respondents are wholesalers selling to firms, groups of individuals, and to individuals at prices approximating the prices at which retailers can and do buy the same or comparable merchandise at wholesale prices.

Par. 8. A substantial part of the consumer-user public has a preference for buying merchandise, including the classes of merchandise sold by respondents, directly from wholesalers or jobbers, believing that by so doing they obtain lower prices, superior quality of merchan-— dise, and other advantages.

Par. 9. The acts and practices of the respondents in using the foregoing false, deceptive, and misleading statements and representations have had and now have the capacity and tendency to, and do, mislead and deceive a substantial portion of the purchasing public into the erroneous and mistaken belief that said statements and representations were and are true. Asa result of such induced erroneous and mistaken belief, a substantial number of the purchasing public have purchased respondents’ merchandise.

Par. 10. The aforesaid acts and practices of the respondents, as herein alleged, are all to the prejudice and injury of the public and constitute unfair and deceptive acts and practices in commerce within the intent and meaning of the Federal Trade Commission Act. Report, Frnpines as To THE Facts, anp Orprr Pursuant to the provisions of the Federal Trade Commission Act, the Federal Trade Commission on August 19, 1944, issued and ve sequently served its complaint in this Price since upon the respondents named in the caption hereof, charging them with the use of un- TRAVELLERS LUGGAGE CO. 317 313 Findings fair and deceptive acts and practices in commerce in violation of the provisions of that act. After the filing by the respondents of their answer to the complaint, hearings were held before a trial examiner of the Commission theretofore duly designated by it, at which testimony and other evidence were introduced in support of and in opposition to the complaint. Thereafter, the proceeding regularly came on for final hearing before the Commission on the complaint, answer, testimony and other evidence, report of the trial examiner upon the evidence and the exceptions to such report, and briefs in support of and in opposition to the complaint (oral argument not having been requested) ; and the Commission, having duly considered the matter and being now fully advised in the premises, finds that this proceeding is in the interest of the public and makes this its findings as to the facts and its conclusion drawn therefrom: FINDINGS AS TO THE FACTS ParacraPH 1. The respondents, Samuel Schreibersdorf, Louis Schreibersdorf, Julius Schreibersdorf, Sidney Schreibersdorf, Saul Schreibersdorf, Joseph Schreibersdorf, and Bertha Schreibersdorf, are _ copartners trading under the name Travellers Luggage Co. They are engaged in the sale and distribution, both at wholesale and at retail, of luggage and various others items of merchandise, including golf equipment, brief cases, wallets, ladies’ handbags, umbrellas, and fountain pens. Their retail store is located at 7 Broadway, New York, N. Y. Their wholesale business is conducted from other locations in New York City.

Par. 2. In the course and conduct of their business, both at wholesale and at retail, respondents cause and have caused their products, when sold, to be transported from their places of business in the State of New York to purchasers thereof located in various other States of the United States and in the District of Columbia. Respondents maintain and have maintained a course of trade in their products in commerce between and among the various States of the United States and in the District of Columbia.

Par. 3. In the operation of their retail store and for the purpose of inducing the purchase of their merchandise by the public at retail from such store, respondents have issued and caused to be distributed among members of the public cards known as “discount cards.” These cards were usually delivered by respondents to personnel managers and purchasing agents of large industrial and banking concerns located in New York City, and were distributed by such individuals Findings 43 ¥.T.C. among the employees of their respective concerns. These discount cards read as follows:

TRAVELLERS LUGGAGE CO.

7 Broadway New York City Digby 4-8260 The penrerigs sore ke oe WMPLOVeCd DV roo. eee eee Is entitled to a special discount of 40 percent from our list price.

Par. 4. It is a recognized business custom for wholesalers to publish or quote “list” or “catalog” prices which are subject to discount to retailers, the list price being the approximate price at which the merchandise is expected to be sold at retail, and the difference between the list price and the net price representing the profit to the retailer. The public is aware of such custom and believes that the list price is approximately the usual and customary retail price, and that any reduction below the list price represents a saving from the retail price. Respondents’ discount cards constituted a representation by them that the recipients of such cards could, by the use thereof, purchase merchandise from respondents at prices 40 percent lower than the prices at which such merchandise was usually and customarily sold by respondents at retail in the regular and normal course of business. Par. 5. This representation was erroneous and misleading. The fact was that in order to be able to appear to allow a discount of 40 percent, respondents marked up and increased the prices on their merchandise (except those items on which the manufacturer had fixed the retail price) in such manner that after the purported discount was allowed the remaining net prices represented the real retail prices of the merchandise, that is, the prices at which the merchandise was regularly and customarily sold at retail by respondents in the usual and normal course of business. | Par. 6. The acts and practices of respondents, as herein set forth, had, the tendency and capacity to mislead and deceive a substantial portion of the purchasing public with respect to the actual prices and values of respondents’ merchandise, and the tendency and capacity to cause such portion of the public to purchase substantial quantities of respondents’ merchandise as a result of the erroneous and mistaken belief so engendered.

TRAVELLERS LUGGAGE CO. 319 313 Order CONCLUSION The acts and practices of the respondents as herein found are all to the prejudice of the public and constitute unfair and deceptive acts and practices in commerce within the intent and meaning of the Federal Trade Commission Act. . ORDER TO CEASE AND DESIST This proceeding having been heard by the Federal Trade Commission upon the complaint of the Commission, the answer of respondents, testimony and other evidence introduced before a trial examiner of the Commission theretofore duly designated by it, report of the trial examiner upon the evidence and the exceptions to such report, and briefs in support of and in opposition to the complaint (oral argument not having been requested) ; and the Commission having made its findings as to the facts and its conclusion that respondents have violated the provisions of the Federal Trade Commission Act: It is ordered, That the respondents, Samuel Schreibersdorf, Louis Schreibersdorf, Julius Schreibersdorf, Sidney Schreibersdorf, Saul Schreibersdorf, Joseph Schreibersdorf, and Bertha Schreibersdorf, individually and as copartners trading as Travellers Luggage Company, or trading under any other name, and their agents, representatives and employees, directly or through any corporate or other device, in connection with the offering for sale, sale and distribution of luggage and other merchandise in commerce, as “commerce” is defined in the Federal Trade Commission Act, do forthwith cease and desist from:

Representing through the use of “discount cards” or by any other means that merchandise may be purchased from respondents at a discount or at special or reduced prices, when the prices at which such merchandise is actually sold are in fact the prices at which such merchandise is usually and customarily sold by respondents in the regular and normal course of business.

It is further ordered, That the respondents shall, within 60 days after the service upon them of this order, file with the Commission a report in writing setting forth in detail the manner and form in which they have complied with this order.

Syllabus 43 F. T.C.