Cracking down on misleading coupon and rebate offers, the Federal Trade Commission yesterday announced settlements with three major consumer firms, requiring speedier rebates to some consumers and compensation to others who may have been deceived by the original offers.
The action comes at a time when a growing number of firms, particularly those selling electronic equipment, are offering rebates as incentives to buy their products. Consumers often discover after they have bought the products that the rebates come with a host of fine-print rules that make the offers hard to redeem. At the same time, the FTC has found two companies that sent rebates to their customers many weeks later than promised.
"It's important that consumers be able to rely on what marketers are telling them" when they buy products based on rebates, said Jodie Bernstein, director of the FTC's Bureau of Consumer Protection. "Companies that offer savings through coupons and rebates have an obligation to say what they mean and mean what they say."
The FTC criticized a coupon campaign by Bumble Bee Seafoods Inc. In that campaign, a label attached to the face of a can of tuna said consumers could get 75 cents off their next purchase. But on the coupon printed on the inside of the label--which a customer would not see until after buying the product and taking it home--the fine print required the purchase of at least five cans before the coupon would be redeemed.
The FTC said the campaign misled consumers into thinking they had to buy only one can to redeem the coupon. Bumble Bee has agreed to launch a new campaign, issuing at least 7.6 million coupons for 75 cents off any purchase of two cans of tuna. Bumble Bee agreed to pay at least $200,000 to consumers under this campaign--or pay the difference between its actual costs and $200,000 to the U.S. Treasury.
The other two agreements announced yesterday settle allegations that two electronic companies sent rebates to their customers one to five months later than promised. The firms are Memtek Products Inc., which sell Memorex brand products, including computer diskettes and blank videotapes and audiotapes, and Umax Technologies Inc., which sells computer scanners. Both agreed to send all rebates within the time they promised, or within 30 days if no time is specified.