- Refunds
- Unordered Merchandise
- Negative Option Plans
- Layaway
- Gift Cards
- Savvy Online Shopping
- Rent to Own (RTO)
- Item Pricing
- Rebates
Refunds
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General Business Law 218-a
Merchants must clearly post their refund policies. If a refund policy is not posted, consumers have 30 days from the date of purchase to receive a full refund as long as they can show with their receipt, or any other confirmation given by the merchant, that the 30 days have not elapsed.
Merchants are not required to accept returns or make refunds if they post a "no-refund or return" policy.
Retailers must make a written copy of their refund policy available upon request and post such availability on their refund policy signage.
Refund policy signage must provide consumers with advance notice if the return of any purchase is subject to fees, and set forth the exact dollar or percentage amount of such fees. This includes disclosing restocking fees, which are defined as "any amount charged by a seller for accepting returned merchandise and issuing a refund or credit."
Unordered Merchandise
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General Business Law 396(2)(a)
When a consumer receives merchandise that was not ordered or requested, the merchandise is considered a gift. The consumer may use or dispose of unordered merchandise without any obligation. New York law requires companies that send unordered goods to include a conspicuous notice stating that payment is not required. If the sender continues to transmit bills or demand payment, the consumer may sue for an injunction, costs and attorney fees.1
Negative Option Plans
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16 C.F.R. Part 425 (2004)
A "negative option" is any type of sales term or condition that allows a seller to interpret the customer's silence or failure to take an affirmative step as acceptance of an offer; goods or services are sent to the customer automatically unless the customer affirmatively notifies the seller that he or she does not want them. Typical negative option plans include record and book clubs, magazine subscriptions and other continuity programs, and free trial offers.
The Negative Option Plan Rule issued by the Federal Trade Commission (FTC) requires sellers to clearly and conspicuously disclose the material terms of a negative option plan to consumers before they subscribe and to follow certain procedures in operating the plan. The Rule enumerates seven material terms that sellers must disclose clearly and conspicuously. In addition, the Rule requires sellers to follow certain procedures, including: abiding by particular time periods during which sellers must send introductory merchandise and announcements identifying merchandise the seller plans to send; giving consumers a specified time period to respond to announcements; providing instructions for rejecting merchandise in announcements; and honoring promptly written requests to cancel from consumers who have met any minimum purchase requirements. In addition, New York Law prohibits the inclusion in retail installment agreements of any provision by which the "buyer consents to receive goods or services on a regular or irregular basis."2
The FTC's Negative Option Rule requires companies to provide consumers with information about their plans, clearly and conspicuously, on any promotional materials for enrollment. If the sales presentation for a plan is made orally, for example, over the telephone, the terms and conditions must still be disclosed clearly and conspicuously during the presentation. For example, companies must inform about:
- whether there's a minimum purchase obligation;
- how and when you can cancel your membership;
- how many announcements and rejection forms you'll receive each year, and how often you'll receive them;
- how to reject merchandise;
- the deadline for returning the rejection form to avoid shipment of the merchandise; and,
- whether billing charges include postage and handling.3
Layaway
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N.Y. General Business Law 396-t
Layaway plans allow consumers to pay for an item over time. A layaway plan is a written contract that involves a purchase for specific merchandise costing more than fifty dollars ($50) for which a consumer agrees to pay in four (4) or more installments and the merchant agrees to make delivery of the merchandise at a specific date to be determined by the seller and/or consumer.
If entering a layaway agreement, make sure you read ALL of the terms in the contract, and have your questions answered before moving forward with the arrangement. Be sure to retain a copy of the contract and maintain a record of your payments. It is unlawful for a merchant to accept payment from a consumer without disclosing, in writing, the following:
(1) A description of the merchandise to be purchased;
(2) The total cost of the item, including tax, installation, delivery or freight charges, cost of using the layaway plan (if this is not disclosed, they cannot charge a fee);
(3) The duration of the layaway plan;
(4) The required payment schedule, if any, and the consequences of missing payments;
(5) The merchant's refund policy with respect to payments made by consumers; and,
(6) The location, if other than the place of purchase, where the merchandise is being stored or prominent disclosure to the consumer as to the time at which the merchandise will be pulled and held for them from the store's inventory.
The merchant must tender the specified merchandise in good condition to the consumer upon receipt of the final payment, unless otherwise provided in the layaway plan. The Office of the New York State Attorney General is responsible for enforcing violations.
Gift Cards
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General Business Law 396-i
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Credit Card Accountability Responsibility and Disclosure ("CARD") Act of 2009
A gift card or gift certificate is a payment device that is "redeemable at a single merchant or an affiliated group of merchants" and is "issued in a specified amount."
Stores that sell gift certificates or issue store credits, or retail establishments that conduct a "closing out sale" or "defunct business sale," cannot refuse payment by gift card for purchases made in the store unless there is an expiration date associated with the use of the gift card and the gift card has expired. A store cannot prevent the consumer from using the gift card according to the agreed terms and conditions and cannot alter the terms and conditions after a gift card has been purchased.
What Must a Gift Card Include?
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General Business Law 396-i
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NYS Consumer Protection Board "Gift Card Tips" CARD Act of 2009
All advertisements and purchases of gift cards must be accompanied by a conspicuous statement that "Terms and Conditions are Applied to Gift Certificates/Gift Cards." The same must be provided with mail-offers, e-mail offers, and all advertisements or promotions. The terms and conditions must contain:
- the expiration date (when the card is purchased or re-loaded, the card must not expire in less than 5 years);
- whether any fees are assessed against the balance of the gift certificate and the amount and frequency of the fee; and,
- whether a fee will be charged for the replacement of a gift certificate that is lost, stolen, or destroyed.
Additional terms and conditions must be clearly printed on the gift card, or on an envelope or package containing the gift card if a toll free telephone number is provided for access to the additional terms and conditions.
Gift cards sold below face value or at a volume discount, or gift cards given as a prize to consumers or employees are not required to have terms and conditions of use included.
Once gift cards are purchased, retroactive fees are not permitted. Some retailers charge an issuance fee when the gift card is purchased, but they cannot charge such fees after the card has been purchased and issued.
Monthly service fees, also termed dormancy fees or inactivity charges, can only be assessed against the balance of the gift card after it has not been used for greater than a 13-month period.
Savvy Online Shopping
Almost all retail establishments provide the option of Internet shopping for consumers. With just a few clicks, consumers can buy what they need without ever having to leave their home. However, with personally identifying information moving across the web, it is important that consumers ensure their transactions are secure. To identify a secure website, verify that "https" precedes the Internet address and a closed lock or an unbroken key symbol appears in the lower part of the window. Use a secure Internet connection when placing orders that require the transmission of personally identifying information.
If you create an account with an on-line retailer, read the website's privacy policy before conducting business to ensure they will use your personally indentifying information only in safe and necessary ways. Utilize passwords that are difficult for thieves to figure out and change them often. Delete your web browser's "cookies," stored information on your computer, frequently. Operating systems, firewalls, anti-virus protections, and anti-spyware programs should be updated regularly. Consumers should only make purchases from reputable stores with third party privacy verification.
Shop around at other online and brick and mortar stores for better prices, and make certain there are no recalls on items in your order. Always double-check the price and quantity before processing the order. Read and understand the store's policies, such as return/refund and shipping and handling. Once the purchase is processed and confirmed, print out the confirmation page, the terms and conditions, and the item description for your records. Upon receipt of the order, ensure that everything is in good condition and that every component of the order has been filled.
Rent-to-Own
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Personal Property Law 500 et seq.
Rent-to-own (RTO) companies enter into contracts with consumers to rent and sell new and used products. The contracts can allow the consumer to purchase the products after a stated period and can be cancelled at any time by the consumer. RTO contracts can, however, result in the consumer paying more than the value of the item and, consumers face possible repossession after only one missed payment.
If you decide to enter into a RTO contract, consider the following:
- Is the item of interest a want or a need?
- Is the item new or used?
- Is there a credit and/or employment check?
- Can I afford this item?
- How much must I pay every period?
- Are there additional fees and charges on top of periodic payments?
- What is the period for payments?
- Must I make a minimum number of payments or wait a certain amount of time before returning the item without penalty?
- What will be the total cost to own the item based on the agreed upon payment method?
- When is ownership of the item transferred to the consumer?
- May I make payments earlier than required?
- Is there a grace period for late payments?
- Can an RTO contract be reinstated after payments that were missed or late were paid?
- Who must pay for item repairs?
- Are any applicable owner manuals given with the item?
- Who bears responsibility for damage/theft to the item?
Consumers should request that the annual percentage rate of interest, any additional fees not already listed in the contract, and receipts for all payments be in writing to avoid any confusion and disputes over how much is truly owed. Keep these documents in a safe and secure place.
What is Required in the RTO Rental Purchase Agreement?
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N.Y. Personal Property Law 500-05
RTO stores are required by New York State law to provide in the rental purchase agreement:
- descriptions of the merchandise
- the quality of the merchandise
- the amount and date for rental-purchase payments
- the total cost to own the item
- any additional fees and their purpose
- how much the consumer is liable for damages
- that the consumer does not own the item if failing to comply with the contract
- the cash price of the merchandise
- the conditions of an early purchase option for consumers and when a seller can terminate the contract
Under the law, the maximum total cost and early purchase price are computed based on the cash price for the item. The "cash price" means the price at which the retailer, in the course of business, would offer to sell the merchandise to the consumer for cash on the date of the retail-purchase agreement. The RTO is permitted to double the cash price as the consumer purchase price. The cash price must be advertised Thus, RTO stores are allowed to charge consumers twice the advertised cash price to purchase the item. Consumers should consult an attorney if they feel an RTO store is engaging in illegal business practices. Consumers may also contact the Office of the NYS Attorney General at 1-800-771-7755, or the New York State Department of State Division of Consumer Protection at 1-800-697-1220.
Item PricingItem pricing laws require that, with certain exceptions, each item in a store be individually marked with a price sticker. There is no State item pricing law in effect. However, several counties have their own item pricing laws. Therefore, it is advisable for consumers to check with their local authorities.
Rebates-
General Business Law 350-a(3) & 391-p
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Agriculture and Markets Law 197-b
A rebate is an offer to provide cash or credit to purchasers conditioned on the purchaser submitting a request for redemption. It is a type of sales promotion, and may be offered by a retailer, the manufacturer of the product, or both. Diligent consumers can potentially benefit by redeeming the rebate, although many consumers do not because they fail to submit the proper request. Manufacturers and retailers offering rebates do not always make the terms of the rebate clear to consumers in advertisements and at the point of sale. While consumers tend to assume that a rebate will be in the form of a check, some rebates are actually provided in the form of a credit toward the purchase of another product. And, if the rebate is provided in the form of a pre-paid rewards card to make an additional purchase, consumers can face limitations on the use of the instrument, and undisclosed fees for activation, checking of balances, and account maintenance for periods of inactivity.
For merchandise where a rebate is offered, merchants must place in their advertisements the actual selling price, "clear and conspicuous" notice of what the price will be after the rebate, and the steps required of the consumer to acquire the rebate. Merchants must display, either near the item or on the item directly, the full retail price for the merchandise. Additionally, merchants and advertisers must conspicuously disclose if the rebate will be issued in any form other than cash or check, such as a gift card, and whether any fees will apply to exercise the rebate.
The rebate offer must give the consumer at least 14 days to submit a request for redemption after purchase (or otherwise becoming eligible). The offeror of the rebate must send payment to the consumer within 60 days of receipt of a properly-submitted request for redemption.
- N.Y. Gen. Obligation Law 5-332; 15 U.S.C. 3009 (2004). ↑
- N.Y. Pers. Prop. Law 413(10)(g). ↑
- http://www.ftc.gov/bcp/edu/pubs/consumer/products/pro09.shtm ↑
- Is the item of interest a want or a need?