Retail Advertising Regulations
9 AAC 05.010-9 AAC 05.900
9 AAC 05.010. Statement of Purpose.
- Secs. 20 - 900 of this chapter interpret the terms "unfair methods of competition" and "unfair or deceptive acts or practices" as those phrases apply to the public advertisement and in-store presentation of retail goods and services. Secs. 20 - 900 of this chapter are intended to clarify the law applicable to major areas of deceptive advertising practices, but are not intended in any way to limit the application of the Unfair Trade Practices Act, AS 45.50.471 - AS 45.50.561, to other deceptive practices, not specifically dealt with in this chapter.
9 AAC 05.020. Advertisement of Price Reductions From Former Price.
- It is an unfair or deceptive act or practice for any seller to advertise merchandise using words such as "sale," "now on sale," "reduced," "special," or other language indicating a reduction in price, if the seller
- advertises the existence of a reduced price which is not a materially significant reduction from the seller's regular price for the merchandise; or
- fails to disclose the period of time during which the advertised price will be effective if the time period is less than four days from the date of the advertisement; or
- uses a general headline or lead-in for advertised items indicating price reductions when any of the advertised items are not offered at a reduced price, unless the seller discloses in the advertisement which items are not offered at a reduced price or which items are offered at a reduced price.
- It is an unfair or deceptive act or practice for any seller to advertise merchandise for sale under special circumstances using phrases such as "selling out," or "going out of business," unless the retail outlet is in fact going out of business, and the advertised merchandise is permanently reduced in price to clear the merchandise.
- It is an unfair or deceptive act or practice for any seller to advertise merchandise for sale under special circumstances using phrases such as "must be sacrificed," unless the merchandise so advertised is permanently reduced in price to clear the merchandise.
- It is an unfair or deceptive act or practice for a seller to advertise the same merchandise as being "on sale" or reduced from the seller's regular price if, in fact, the "on sale" price is the price for which the goods are actually sold for more than six months out of any 12-month period, or, in the case of seasonal merchandise, for more than one-half of the time it is offered by the seller unless the price is permanently reduced to clear the merchandise. An advertisement in which the seller discloses the last date or period of time when the seller's regular price was in effect meets the requirements of this section.
9 AAC 05.030. Price Comparisons.
- It is an unfair or deceptive act or practice for any seller to advertise a price comparison
- which is based on any price other than the seller's own regular price, unless the seller discloses the nature and source of the referenced comparison price, such as "manufacturer's list price" or "comparable retail value." If the reference price is not a usual or customary retail price in the trade area, the seller may use the reference price if the seller discloses the location where it is a usual or customary retail price, such as "Seattle price"; or
- which is based on the difference between the price of a system, set, or group of items and the price of the items purchased separately, unless the seller in good faith has offered for sale the separate items at the referenced comparison price in the recent, regular course of business or unless the items are customarily sold as separate items; or
- which is based on words such as "wholesale," "at cost," "factory price," or similar words unless the price is in fact no greater than normal wholesale cost, including actual freight cost if paid by the seller; or
- which is based upon a comparison of price with the price of merchandise materially different in composition, grade or quality, style or design, model, name or brand, kind or variety, or service and performance characteristics, unless the general nature of the differences is disclosed in the advertisement.
9 AAC 05.040. Availability of Advertised Merchandise.
- It is an unfair or deceptive act or practice for any seller to advertise merchandise for sale at a stated price, if the seller
- does not have the merchandise readily available at or below the advertised price in quantities normally sufficient to meet a reasonably expected public demand during the effective period of the advertised price, unless the seller is able to demonstrate that it ordered sufficient quantities of the advertised merchandise in adequate time for delivery; or
- fails to disclose in the advertisement all reasonably foreseeable exceptions, limitations and restrictions with respect to the availability of the merchandise, including but not limited to quantities of advertised merchandise available, quantities of advertised merchandise which may be purchased by an individual consumer, limitations on availability at individual stores in a chain, and limitations as to the length of the sale; or
- uses any text, statements, illustrations, drawings, or photographs in advertisements which do not fairly describe or depict or which are not representative of the advertised merchandise.
- It is an unfair or deceptive act or practice for any seller to advertise merchandise when the merchandise is not immediately available in the trade area unless the advertisement discloses that the item is not available in the trade area and, if not available, that shipping and handling costs are extra if they are not included in the price advertised. A catalog which gives tables for calculating shipping and handling costs meets the requirements of this section.
9 AAC 05.050. Advertising Reductions on Items in a Group.
- It is an unfair or deceptive act or practice for any seller to advertise price reductions on a group of differently priced items using phrases such as "as low as" or "up to 50 percent off" which merely identify the lowest reduced price in the group or the highest percentage or amount of price reduction in the group, if the lowest price or the highest percentage or amount of price reduction is not reasonably representative of a substantial number of the varied items in the group. Advertisements are presumed to meet the requirements of this section when the seller
- discloses in what way the items advertised at the lowest price or the greatest price reduction are not representative of the varied items in the group, such as by stating what portion of the total group of items are at the lowest price or subject to the greatest price reduction; or
- discloses both the highest and lowest reductions in prices for the advertised group; or
- states accurately that the prices of a group of items are reduced by a uniform amount or percentage, such as "all sofas 30 percent off."
9 AAC 05.900. Definitions.
- In this chapter
- "advertising" (including the terms "advertisement" and "advertise") includes the attempt directly or indirectly through publication, dissemination, solicitation, endorsement or circulation, display, including solicitation or dissemination by mail, telephone or door-to-door contacts, or in any other way, to induce a person to enter or not enter into an obligation or acquire title or any other interest in any merchandise or to increase the consumption of it or to make a loan;
- "disclose" means that the statement, representation, or term is presented clearly and conspicuously in the size, sound, color, or other contrasting manner that an ordinary person would readily observe it considering the circumstances, manner, and mode of presentation;
- "merchandise" means goods or services or a combination of goods and services;
- "person" includes a corporation, company, partnership, firm, association, institution, organization, business trust, or society, as well as a natural person;
- "price comparison" means the comparison in any advertisement of the seller's current price for merchandise with any other price or statement of value for the merchandise or the making of other claims of price reduction or savings with respect to that merchandise in comparison to other merchandise;
- "regular price" means the actual, good faith price at which the seller openly and actively offered the merchandise to the public on a regular basis, for a reasonable period of time in the recent, regular course of the seller's business. In determining whether merchandise was openly and actively offered, whether a period of time was reasonable, or whether a price was in good faith, the following factors will be considered: the particular merchandise or industry, the season, the number sold at the higher price, shelf life, and other material factors. If a seller has openly and actively offered a good faith price for the 14 selling days immediately before a price reduction, it will be presumed that the higher price was offered for a reasonable period of time in the recent, regular course of business. A seller may use a shorter period of time to establish a regular price, but the seller will then have the burden of showing that the shorter time was reasonable and that the higher price was a good faith price;
- "seller" means any person who offers merchandise for retail sale;
- "trade area" means the geographic area where the seller does business as determined by the location of the media in which the advertisement is published and the predominant location of the residences of those customers to whom the advertisements are directed or to whom the seller mails advertisements.