Are You Prepared to be Out of Stock?

Back in 1971, the FTC enacted the "Unavailability Rule" (a/k/a the Retail Food Store Advertising and Marketing Practices Rule, 16 CFR Part 424), which provides that it would be an unfair or deceptive act or practice under the FTC Act if a grocery store advertised products that it did not have in stock. The rule did provide some defenses, which, after amendments in 1989, provided that there would be no violation if the ad "clearly and adequately discloses that supplies of the advertised products are limited or the advertised products are available only at some outlets." The rule also provided that there would not be a violation of the FTC Act if: a) adequate quantities of the product were ordered to meet reasonably anticipated demand, b) the retailer offered a "raincheck" for the unavailable items, c) there was a comparable product offered at a comparable price, or d) the food retailer offered other compensation at least equal to the advertised value.

The FTC announced that it is considering amending this regulation, and asked several questions that may be of interest if you are involved in the food business or any kind of retail operation.

The FTC is looking for comments about how well the rule has worked, whether it has imposed undue burdens on business (especially small business), and whether it has actually helped consumers. Comments are being sought as to whether the rule could be eliminated, or broadened to include stores not currently covered, such as drugstores, department stores, electronics retailers, and others.

If you are interested in providing your comments, they must be submitted by Oct. 19, 2011. You can file your comments online at https://ftcpublic.commentworks.com/ftc/unavailabilityruleanpr, or on paper by mailing or delivering to Federal Trade Commission, Office of the Secretary, Room H-113 (Annex N), 600 Pennsylvania Avenue, NW, Washington, DC 20580.

 

Related Attorney: Theodore L. Banks