Adams Drug Company, Inc.

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IN THE '1A'rrER OF ADAMS DRGG CO:vrPANY, INC., ET AL.

CONSENT ORDER, ETC., IN REGARD TO THE ALLEGED VIOLA nox OF THE FEDERAL TIL\DE COl\D:ISSIO ACT Docket 0-111;. Complaint, Apr. , 19GB-Decision, Apr. l6, 1962 Consent order requiring the corporate operators of a number of retail drugstores in the Xew England States and Kew York to cef1se representing falsely, in advertisements in nevtspapers, that excessive amounts were usual retail prices by such statements, among others, as " Steel Construction Caulking Gun usually lad 8S , . . Cellulose Sponge l\Iop Reg. 3.95 2.99", and Electric Shavers at Discount Prices 28.50 Schick ' Speed' . . . 18. 88, n)LAINT Pursuant to the provisions of the Federal Trade Corn mission Act ,md by virtue of the authority vested in it by said Act, the Federal Trade Commission, having reason to believe that Adams Drug Company, Inc., a corporation, and Leonard Salmanson and Donald Salmanson, individuaDy and as offcers of said corporation, hereinafter rcfelted to as respondents, have violated the provisions of said Act, and it appearing to the Commission that a proceeding by it in respect t.hereof \yould be in the public interest, hereby issues its complaint, stating its charges as follows:

PAR.\GRAPH 1. Respondent Achul1s Drug Company, Inc., is a corporation organized, existing, and doing business under and by virtue of the low;s of the State of m,ode Island, with its oflee and principal place of business located at 27 J\1ason Street, Pa,ducket, R. Respondents Leona.rd Salmanson and Donald Sa1manson are in dividuals and are oflcers of said corporate respondent. They formulate, direct and control the acts and practices of the corporate re- Their spondent, including the acts and practices hereinafter set forth. ad(lresses are the same as that of the corporate respondent. \R. 2. Through said corporate respondent and a "holly owned subsidiary corporation, respondents own and operate a nUlnbcl' of retail "e"l, drugstores within the States of Rhode Island, Massachusetts, llampshire, Connecticut, and N e\y York.

Respondents are now, and for some time last past have been sale, and distribution of engaged in the advertising, offering for sale electric razor, and other articles drugs, appliances, mops, "ax, scales of general merchandise at retail to members of the purchasing public. PAIL 3. In the course and conduct of their business, respondents now cause, and for some time last past have caused, thejr said merchandise _____ ___ !);) ADAMS DRUG CO. , IKC. , ET AL. 729 i28 Complaint to be shipped from their place of business in Rhode Island to their several stores in various other States of the Gnited States, for sale to the purchasing public. In such instances shipments are made to respondents' stores in States other than that in ,which such shipments have originated, and respondents maintain, and at all times mentioned herein have maintained, a substantial course of trade in said merchandise in commerce, as "commerce" is defined in the Federal Trade Commission Act. In addition to the aforesaid articles of merchandise respondents also cause advertisements and other promotional material to be transported and shipped from their aforesaid place of business in the State of Rhode Island to the various other States in which their several stores are located.

PAR. 4. In the course and conduct of their business, and for the purpose of inducing the sale of their said articles of merchandise respondents now make, and have made, numerous statements and representat.ions respecting the retail price of their merchandise in advertisements published in various ne'\"spapers of general circ ulation. Typical and illustrative of the foregoing, but not all inclusive thereof, are the following:

Steel Construction Caulking Gun Lsually 1.49 881 Cedar '99' Cellulose Sponge :\Iop Reg. 3.95 2.

Auto Polish Sale! Wax Paste '1' nrtle 'Vax List Price 2. 00 each Choice 88 ?lnade by 'Detecto Batbroom Scale :'Ifg.'s List Price ;'.

!)B Electric Shal'ers at Discount Prices 28.50 Scbick " 3-speed" - - -- - -- --- --- n - - n --- - -- is. SS 26.93 Remington " Roll- A - :.Iatic 18. 24.9,') Sun benm (' Rollmastcr --- n - n - - - - - - n 19. 24.95 Norelco " Speedsha vel' 16. 19.50 Ronson with " Super Trim nnnnn_-_n 14. 18.50 Lady Remington_--- - - --- n- __n- - - -- u- - 13. 730 (FEDERAL TRADE CO:;L\fISSIOX DECISIONS Complaint 60 F.

PAR. 5. Through the use of the aforesaid statements ane! others similar thereto, but not included herein, respondents have represented directly or indirectly:

a. That $1.49 is the respondent's usual and regular retail selling price for t.he said Caulking Gun in the recent, regular course of their business.

b. That 83.95 is the respondents' usual and regular retail selling price for the sale! O'cce!ar Cellulose Sponge Mop in the recent, regular course of their business.

c. That the amounts designated as "l\Ifg. s List Price" and "List Price" ate the prices at ,, which the merchandise so advertised is usuany and regularly sold at retail in the trade areas "here the representations are made.

d. That the higher stated prices for said electric razors are the prices at which the said merchandise is usually and regularly sold at. retail by t.he respondents in the recent: regular course of their business.

e. That purchasers of the aforesaid articles 01 merchandise are afforded savings in amounts equal to the differences bet\yeen the said higher stated prices and the corresponding lower stated price amounts. PAR. 6. The foregoing representa60ns aJ'e false, misleading and deceptive. In truth ,mc1 in fact:

a. Sl.49 is not respondents' usual and regular retail selling pnce for the said Caulking Gun in the recent, regular course of their business, but is in excess of the actual retail selling price. b. $3.95 is not respondents' usual and regular retail selling price for the said O'cedar Cellulose Sponge Mop in the recent, regular course of their business, but is in excess of the actual retail selling prlce.

c. The amounts set out in connection with the terms ':::Ifg. s List Price" and "List Price ' arc not the prices at . which the merchandise referred to is usually and regularly sold at retail in their trade area but are in excess of the actual retail selling prices. d. The higher stated prices for said electric razors arc not the prices for "which the said merchandise is usually and regularly sold by respondents in the recent, regular course of their business, but are in excess -of the actual ret.ail selling prices. e. Purchasers of the aforesaid articles are not afforded savings in the amounts equal to the differences between said higher prices and the corresponding lower prices.

PAR. 7. In the course and conduct of their business at an times mentioned herein, respondents have been in substantial competition ADAMS Drug CO, ) IXC. , ET AL. 731 728 Decision and Order in C01nmerce with corporations, firms, and individuals engaged in the sale of merchandise of the same general kind and nature as that sold by respondents.

PAR. S. The use by respondents of the aforesaid false, misleading, and deceptive statements, representations, and practices has had, and now has, the capacity and tendency to mislead members of the general public into the erroncous and mistaken belief that said statements and representations were and are true and into the purchase of substantial quantities of respondents' articles of merchandise by feasons of said erroneous and mistaken belief.

\R. a. The aforesaid acts and practices of the respondents, as herein alleged, were, and are, all to the prejudice and injury of the public and of respondents' competitors and constituteel, and now constitute, unfair methods of competition and deceptive acts and practices in commerce, in violation of Section 5(a) (1) of the Federal Trade Commission Act.

DECISION AXD ORDER The Commission Imving heretofore determined to issue its complaint charging the respondents named in the caption hereof with violation of the Federal Trade Commission Act, and the respondents having been served with notice of said determination and with a copy of the complaint the Commission intended to issue, together with a proposed form of order; nnd The respondents and counsel for the Commission having thereafter executed an agreement containing a consent. order, an admission by respondents of all the jurisdictional facts set forth in the complaint to issue he1'e.1n, a statement that the signing of said agreement is for settlement purposes only and does not constitute an admission by rcspondents that the law has been violated as set forth in such complaint and waivers and prmTisions as required by the COllllnission s rules; and The Commission, having considered the agreement, hereby accepts same, issues its complaint in the form contemplated by said agreement makes the following jurisdictional findings, and enters the following order:

1. H-respondent, Adams Drug Company Inc., is a corporation organized, existing and doing business under and by virtue of the In ws of the State of Rhode Island, with its offce and principal place of business located at 27 Jlhson Street in the city of Pawtucket, State of Rhode Island.

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732 iFEDERAL TRADE COMMISSION DECISIONS Decision and Order 60 F.

Respondents Leonard Salmanson and Donald Salmanson are offcers of said corporation and their address is the same as that of said corporation.

2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondents, and the proceeding is in the public interest.

ORDER It is ordered That respondents, Adams Drug Co., Inc., a corporation, and its offcers, and Leonard Salmanson and Donald Salmanson individual11y and as offcers of said corporation, and respondents agents, representatives and employees, directly or through any corporate or other device, in connection with the offering for sale, sale, or distribution of drugs, appliances, mops, wax, scales, electric razors or any other articles of merchandise in commerce, as "commerce" is defined in the Federal Trade Commission Act, do forth"ith cease and desist from:

1. Representing, directly or indirectly:

(a) That any amount is respondents' usual and regular retail price for said merchandise when such amount is in excess of the price at which said merchandise is usual11y and regularly sold by respondents in the recent regular course of business.

(b) That any amount is the usual and customary retail price for said merchandise in the trade area or areas where such representation is made, when such amount is in excess of the price at which sa,id merchandise is usually and customarily sold at retail in said trade area or areas.

(c) That any savings areauorclecl in the purchase of saiel merchandise from the respondents' selling price or from the. selling price in respondents' trade area unless the price at which the merchandise is offered constitutes a reduction from the price at "which said merchandise is usually and regularly sold at retail by tlw respondents or at ,which said merchandise is usuany andl'cgularly sold at retail in said trade area.

2. (a) losing the words "usually reg. \ or any other words of similar import or meaning in connection with a stated allOlmt higher than that at which merchandise is be.iug offered for sale. by respondents when such stated higher amount is in excess of the price at which said merchandise has been sold at reutil by responc1Pllts in the recent regular course of business.

(b ) Using the \words "l\ffg. s List Price List Price, cr any ot her words of similar import or meaning in connection with a stated , _ KOR:MA TEXTILE MILLS , INC. , ET AL. 733 728 Complaint amount higher than that. at which merchandise is being offered for sale by respondents when such stated higher amount is in excess of the usual and customary retail price of said merchandise in the trade area or areas \vhere the representation is made. 3. :Misrepresenting, in any manner: the amount of savings nnlilable to purchasers of respondents' merchandise or the amount by TIhich the price of said merchandise has been reduced from the price at which it is usually and regularly sold at retail by the respondents, or in the trade area or areas where the representations are made. It is further ordered That the respondents herein shall, within sixty (60) days after serviee upon them of this order, file with the Commission a report in writing setting forth in detail the manner and form in ,,-hieh they have complied with this order-