DEPARTMENT OF ATTORNEY GENERAL

            CONSUMER PROTECTION AND CHARITABLE TRUSTS DIVISION

                 PRICING AND ADVERTISING OF CONSUMER ITEMS


(By authority conferred on the attorney general by  section   9(6)   of   Act 
No. 449 of the Public Acts of 1976,  being  S445.359(6)   of   the   Michigan 
Compiled Laws)

R  14.201   Definitions.
  Rule 1. As used in these rules:
  (a) "Act" means Act No. 449 of the Public Acts of 1976,  being  S445.351 et 
seq. of the Michigan Compiled Laws.
  (b) "Clearance sale" means an offer by a  person  to   sell   all   offered 
in-stock consumer items at a price  reduced  from   that   person's   regular 
price if the person  intends  to  sell  out  all  such   items   during   the 
advertised period of sale, but  will  nevertheless  reorder   the   same   or 
substantially similar items to be again sold by that person not less  than 90 
days after the reorder.
  (c) "Close out sale" means an offer by a person to  sell  offered  in-stock 
consumer items at a price reduced  from  the  person's   regular   price   if 
consumer items will not be offered by that person  again   due   to   various 
factors, such as:
  (i) The item is no longer manufactured.
  (ii) The source of supply is out of business.
  (iii) The person unilaterally refuses to carry the item.
  (d) "Raincheck" means a written guarantee to deliver  a  specific  consumer 
item.
  (e) "Sale price" means a price offer for a consumer   item   appearing   in 
advertising by use of the word "sale" or words of  similar   meaning,   which 
suggest to a reader, listener, or viewer that the consumer  item   is   being 
offered for purchase at a reduction in price, at a bargain price,  or  at   a 
savings compared with some other person's or the  advertiser's   regular   or 
customary higher price.

  History:  1979 AC.


R  14.202   Sale or reduced price advertisements; disclosures.
  Rule 2. An offer of a consumer item, except baked   goods,   fresh   fruit, 
and fresh vegetables as provided in section 5(4) of the   act,   for   retail 
sale at a sale price, special price, or at a price reduced by  an  amount  or 
proportion, by means of an advertisement disseminated in   the   trade   area 
served  by  any  of  the  advertisers'  retail  outlets   covered   by    the 
advertisement, shall disclose clearly and   conspicuously,   in   conjunction 
therewith, either of the following:
  (a) The dates the consumer item is available for purchase.
  (b) The numerical quantity available for each consumer  item,   and   where 
there is a limitation on how many of the advertised consumer  items  may   be 
purchased by any 1 person, a statement in numerical amount of  how   many   a 
consumer may buy of each advertised consumer item.

  History:  1979 AC.


R  14.203   Disclosing   exceptions,   limitations,    or    restrictions;
  rainchecks and substitutions.
  Rule 3. (1) If an  advertisement  does  not  state  the   quantity   of   a 
consumer item available, and the consumer item cannot  be   sold   throughout 
the advertised period of sale, the advertisement shall   disclose   all   the 
seller's exceptions, limitations, or restrictions with  respect  to   stores, 
consumer items, or prices otherwise included in the  advertisement,  and  the 
advertiser shall make available a raincheck which obligates the advertiser to 
deliver and sell to the consumer  in  possession   of   the   raincheck   the 
consumer item specified in the raincheck, at the advertised  price  stated in 
the raincheck, and at the future date  stated  in  the  raincheck,   not   in 
excess of 90 days, or at an earlier time upon notification to the consumer by 
the advertiser. After  notification   to   the   consumer   is   given,   the 
advertiser may dispose of the item upon failure of the consumer  to  pick  up 
the item in the time specified in section 5(2) of the act.
  (2) An advertiser, instead of providing the consumer  with   a   raincheck, 
may substitute for the unavailable  advertised  consumer   item   a   similar 
consumer item of equal or greater  monetary  value.  This   rule   does   not 
modify a person's obligations under section 5(3) of the act.
  (3) If an advertiser elects to substitute a consumer item   of   equal   or 
greater monetary value because  the  advertiser  is  unable   to   redeem   a 
raincheck due to the unavailability of the advertised  consumer   item,   the 
advertiser may substitute either a similar item   bearing   a   substantially 
equivalent regular price at the advertised lower price, or  a  similar   item 
bearing a higher regular price at a price equal to the   regular   price   of 
the higher-priced item, less the  percentage  reduction   offered   for   the 
unavailable consumer item.
         Example: An advertisement indicates a consumer
         item regularly sells for  $50.00,  but  is  on
         sale this week for only $30.00. The advertiser
         does not disclose the quantity available.  The
         advertiser runs out  of  the  advertised  item
         during the period of sale and knows  that  the
         item cannot be  obtained  again  to  redeem  a
         raincheck. The advertiser may then offer to  a
         consumer either of  the  following  substitute
         similar items:
         (a) Another similar $50.00 item at $30.00.
         (b) Another similar item regularly selling for
         $75.00 at a comparable savings or reduction in
         price; that is, 40% off or $45.00.
  (4) An advertiser shall not limit the obligation to redeem  a  raincheck by 
including a date in a raincheck less than 90  days  from  the  date  of   the 
raincheck. For example, a raincheck which provides for its  redemption  on or 
before a date less than 90 days thereafter is  insufficient  compliance  with 
the act if the purpose of the earlier date is to  evade  compliance   in  the 
event the  guarantee  cannot   be   honored   in   the   shorter   time.   An 
advertiser may, however, redeem the raincheck earlier  than   90  days   upon 
notification to the consumer.
  (5) A raincheck shall contain, but not be limited to, the following:
  (a) Space for a description of the unavailable item.
  (b) Space for the price to be paid  for  the  unavailable   item   of   the 
consumer.
  (c) Space for the signature or initials  of  a   person   authorizing   the 
raincheck.
  (6) The raincheck shall be executed in duplicate, 1 copy to  be  given   to 
the consumer, the other to be retained by the merchant.

  History:  1979 AC.


R  14.204   Successive advertisements.
  Rule 4. Where  an  advertiser   disseminates   successive   advertisements, 
either to the same or different consumer groups,   and   each   advertisement 
contains the disclosures required by section 5 of the act  and  these  rules, 
the advertiser is not obligated to recount or redetermine  the  quantity   of 
consumer items then remaining available for each successive  advertisement if 
the advertiser clearly and conspicuously discloses  that  the  consumer items 
advertised and available in the quantities  stated  are   subject   to  prior 
sale due to previous advertising during prior periods of  time,   and  states 
the date the advertising first appeared.

  History:  1979 AC.


R  14.205   Determination of violation.
  Rule 5. In determining whether a violation of the act  has  occurred,   the 
following shall be considered:
  (a) All circumstances surrounding  nondelivery   of   advertised   consumer 
items which were actually ordered in quantities sufficient to  meet,  or  are 
reasonably related to the intended response  to,   the   advertisement,   but 
were not delivered due to circumstances beyond the  advertiser's  control.
  (b) All circumstances surrounding failure to   make   advertised   consumer 
items conspicuously and  readily  available  for  sale  at   or   below   the 
advertised prices if the consumer items were not made  available   at   those 
prices due to circumstances beyond the control of the  advertiser.  In   such 
cases, the making available of a raincheck shall  be   considered;   however, 
the mere existence of a "policy" to provide a raincheck, in  and  of  itself, 
does not constitute compliance.
  (c)  Whether  the  advertiser  instructed  each   of    the    advertiser's 
employees, agents, or servants of the existence of   a   raincheck;   whether 
the  advertiser  required  those  persons  to  inform   consumers   of    its 
availability; whether, upon learning of the unavailability  of  a  particular 
consumer item, the advertiser posted a notice, proximate to  the  location of 
the unavailable item, stating the procedure for obtaining a   raincheck;  and 
whether the advertiser  posted,  in   a   clear   and   conspicuous   central 
location in the  advertiser's  store,  a  notice   respecting   the   store's 
obligations to deliver a raincheck or substitute.

  History:  1979 AC.


R  14.206   Catalogs, media commercials, circulars, or  newspaper  inserts
  prepared prior to dissemination.
  Rule 6. (1) When an advertiser prepares, or causes to   be   prepared,   an 
advertisement in the form of a catalog, television   or   radio   commercial, 
circular, or an insert to a newspaper, which advertisement must be printed or 
submitted not less than 10 days   prior   to   its   dissemination   to   the 
public, and the advertisement offers to sell  consumer  items   at   a   sale 
price, a special price, or at a price reduced by an  amount  or   proportion, 
and the consumer items are readily and conspicuously   made   available   for 
sale at a price other than the advertised sale price,   special   price,   or 
reduced price during the interim period between the time  of   printing   and 
the dissemination of the advertisement to the public,   the   advertiser   is 
not required  to  disclose  in  the  advertisement   the   numeric   quantity 
available if the advertiser:
  (a) Clearly and conspicuously discloses the period of  time  the   consumer 
items are available for sale.
  (b) Makes available a raincheck to any person who seeks  to  purchase   the 
consumer item during the advertised period  of  sale,   or   substitutes   an 
equal or greater monetary value for the advertised item,  if   the   consumer 
items are not intended to be liquidated as part of a   clearance   or   close 
out sale, or a sale of similar import or meaning.
  (2) Where the consumer items are  not  made   readily   and   conspicuously 
available for sale during the interim period, the advertiser may,  instead of 
subrule(1)(a) and (b) above, disclose the numeric quantity available at  time 
of sale.

  History:  1979 AC.


R  14.207   Clearance and close out sales.
  Rule 7. (1) In  connection  with  advertising   offering   consumer   items 
pursuant to either a clearance or close out sale, where the advertiser is, or 
will be, unable to either give a raincheck or  substitute  an  item  of equal 
or  greater  monetary  value,  the  advertiser  shall  disclose  the quantity 
on hand and available during a disclosed period of sale. However,  where  the 
sale is announced in an advertisement required  to   be   produced  not  less 
than 10 days prior to publication, the  numeric  quantity  to   be  disclosed 
is  that  amount  on   hand   at   the   time   of   preparation    of    the 
advertisement if the sale items are in fact made  readily  and  conspicuously 
available for sale during  the  interim  period   between   preparation   and 
publication and the advertisement discloses as of what  date   that   numeric 
quantity was determined; but if the sale items are not   made   readily   and 
conspicuously available  during  the  interim  period,   then   the   numeric 
quantity stated in the advertisement shall be  equal  to   the   greater   of 
those actually on hand at time of  preparation  of   the   advertisement   or 
actually on hand at time of publication.
  (2) In connection with a "clearance" or "close out"  sale,  an   advertiser 
with more than 1 store, branch, or outlet participating in  the  sale   shall 
make readily and conspicuously available in each store, branch, or  outlet  a 
reasonable number of each consumer item subject  to  the   sale,   unless   a 
disclaimer, as provided in R 14.208(2)(a) or (b), is set forth.

  History:   1979 AC.


R  14.208   General and specific disclaimers; evasions of act or rules.
  Rule 8. (1) General  disclaimers  in  advertising   relating   to   product 
availability  shall  not  constitute  compliance    with    the    disclosure 
provisions of the act or these rules where the disclaimers,  when  used,  are 
relied upon by a participating dealer or store to   evade   the   obligations 
imposed by the act or these rules. Examples of  such  "general   disclaimers" 
include the following:
  (a) "Not all items available at all stores."
  (b) "Available at most stores."
  (c) "Available at participating stores."
  (2) Specific  disclaimers  in  advertising  relating   to   consumer   item 
availability only in certain stores are in compliance  with  the   disclosure 
requirements of the act and these rules. Examples of  a  specific  disclaimer 
include the following:
  (a) "Available only at stores featuring delicatessen departments."
  (b) "Available at the following participating stores: (name and  address of 
each)."
  (3) In determining whether a clearance or close out sale is   used   as   a 
device to evade the act or these rules, the following   criteria   shall   be 
considered:
  (a) Whether the  advertiser  regularly  or  repeatedly   uses   the   terms 
"clearance sale" or "close out sale" in  connection   with   advertising   of 
consumer items.
  (b) Whether the advertiser has in fact made   readily   and   conspicuously 
available for sale all of the  consumer  items  offered  as   part   of   the 
clearance or close out sale.
  (c) Whether the clearance or  close  out  sale  is   merely   a   temporary 
reduction in prices, and there is  an  increase  in  prices   on   the   same 
consumer items after the sale.
  (d) Whether the advertiser has, prior to or during the  sale,  ordered   or 
acquired all or part of the advertised consumer  items,   other   than   from 
existing inventory, for the purposes of the sale.
  (e) Whether the advertiser has reordered the consumer   items   which   are 
the subject of the sale for the purposes of  replacing   the   inventory   of 
sold items so as to make them available for sale  within  90  days   of   the 
advertised clearance or close out sale.
  (4) In order to avoid leading a consumer to believe, in connection  with an 
advertisement disclosing numerical  quantities  where  more  than  1   store, 
outlet, or  dealership  is  participating,  that  each   store,   outlet   or 
dealership has in fact the numerical  quantity  listed   for   the   consumer 
item, and in fact there is  a  variance  in  quantity   among   such   store, 
outlets, or dealerships, the advertiser may do either of the following:
  (a) Have readily and conspicuously available in each  store,   outlet,   or 
dealership a reasonable number of each consumer item subject  to   the   sale 
advertising.
  (b) Provide to each store, outlet, or dealership a  quantity  of   consumer 
items equal to the quantity disclosed for each item.

  History:   1979 AC.


R  14.209   Enforcement and administration of act and rules.
  Rule 9. (1) The act and rules shall be enforced and  administered  by   the 
department of attorney general,  consumer  protection   division,   or   such 
other division of the department as from time to time is  designated  by  the 
attorney general.
  (2) The consumer protection division is located  at   the   Law   Building, 
Lansing, Michigan 48913.

  History:   1979 AC.


R  14.210   Assurance of discontinuance.
  Rule 10. (1) When the  attorney  general  or   prosecuting   attorney   has 
information indicating that a person may have engaged, is  engaging,  or   is 
about to engage in a method, act, or practice which may involve  violation of 
the act, and if he deems the  public  interest  shall  be  fully  safeguarded 
thereby, the attorney general  or  prosecuting  attorney   may   afford   the 
person  the  opportunity  to  negotiate   informally    an    assurance    of 
discontinuance.
  (2) In determining whether the public  interest  is   safeguarded   by   an 
assurance of discontinuance, the attorney general shall consider:
  (a) The nature and gravity of the alleged violation.
  (b) The prior record and good faith of the parties involved.
  (c) Other factors, including, where appropriate,  adequate   assurance   of 
voluntary compliance.
  (3) An assurance of discontinuance is accepted and final  upon  signing  by 
the attorney general or prosecuting attorney.
  (4) An assurance of discontinuance shall include:
  (a) A description of the methods, acts, and  practices   which   a   person 
agrees to permanently discontinue.
  (b) A reference to applicable provisions of the act or these rules.
  (c) A statement that the person does not admit an issue of law or  fact.
  (5) An assurance of discontinuance may include:
  (a) An agreement to pay the costs of investigation.
  (b) An agreement to hold in escrow an  amount  pending   the   outcome   of 
litigation.
  (c) An agreement for an amount of restitution to an aggrieved person.
  (6) An  assurance  of  discontinuance  shall  not  be   introduced   in   a 
proceeding by a person other than  a  party  to  the   assurance,   who   may 
introduce it in the proceeding to modify its terms or to enforce its terms in 
whole or in part.

  History:  1979 AC.


R  14.211   Declaratory ruling.
  Rule 11. (1) A person may request a declaratory ruling  from  the  attorney 
general as specified in section 63 of Act No. 306 of the   Public   Acts   of 
1969, being S24.263  of  the  Michigan  Compiled  Laws,   with   respect   to 
determining whether a course of action is in compliance with   the   act   or 
these rules. The attorney general shall consider the  requests   and,   where 
practical, make a declaratory ruling. A request for a  declaratory  ruling is 
inappropriate where:
  (a) The same, or substantially the  same,  course  of   action   is   under 
investigation, or is, or has been, the subject of a  current  action,  order, 
judgment, or decree initiated or obtained by the attorney general.
  (b) The course of action, or its effects, may be such  that   an   informed 
decision thereon cannot be made, or  can  be  made   only   after   extensive 
investigation, clinical study, testing, or collateral inquiry.
  (2) A request for declaratory ruling shall be submitted   in   writing   to 
the attorney general, and shall  include  full   and   complete   information 
regarding the course of action. Citations of   legal   authority   supporting 
the theory or position of the requester may accompany the request.
  (3) A declaratory ruling  given  by  the  attorney   general   is   without 
prejudice to the right of the attorney general to  reconsider  the  questions 
involved, and, where the public interest requires,  to  prospectively  change 
the ruling. Sixty days' notice of a prospective change   in   a   declaratory 
ruling shall be given to the requester so that a person  may  discontinue   a 
course of action taken in reliance upon the ruling. 

  History:  1979 AC.