FTC Urged to Let Stores Give Rain Checks

The Federal Trade Commission is being urged to allow grocery stores to issue rain checks or substitute items to customers when they run out of advertised specials--a common practice that technically violates government rules.

Food stores that run out of advertised items face fines of up to $10,000, although no one has been prosecuted under the regulation in eight years.

The commission will meet Monday to consider staff recommendations to change that strict regulation by permitting markets that run out of specials to give rain checks to their customers or to offer them equivalent merchandise at the sale price.

In addition, a separate rule change would permit grocery stores to advertise sale prices on products that they have in only small amounts as long as the advertising specifically states that the product is available in limited quantities.

Use of rain checks, substitute items and limited-quantity sales by merchants are common, and the practice is legal in most cases. However, food stores were placed under special regulations in 1971 following an FTC investigation. The rules say that, if a market advertises a sale, it must have enough of the product on hand to fill the demand.

To avoid a fine, the company must prove it had sufficient products for “reasonably anticipated” sales but was overwhelmed by customers.

Proving that can be complex, and supermarkets have complained that meeting the regulations is costly because they are forced to keep detailed records and larger-than-needed inventories in order to avoid prosecution.

During the 1970s, the FTC brought cases against 10 markets under the rule--the last in 1977.