monday, 2 december of 2013

U.S: In Some States, Black Friday Bargains Are Illegal

U.S.

In Some States, Black Friday Bargains Are Illegal


In the 1930s, conventional wisdom had it that the practice of selling some products below cost was misleading to consumers, who would be lured into stores believing all wares were discounted. So many states passed laws barring the practice.


Over time, the purpose of the laws evolved to protecting mom-and-pop shops from the pricing practices of their much-larger rivals. Many are still on the books. Thus, in some places, Black Friday deals are (sort of) verboten. Fortunately for us, these laws are generally ignored, to the extent that retailers and consumers even know they exist.


Some courts have held that slashing prices by itself isn’t illegal, forcing states to amend their laws to add intent. To be in violation of the law in California, for instance, a retailer has to sell products below cost and intend to harm competition by doing so.


Below is a list of states that still outlaw below-cost pricing, taken from various sources. Some we pulled from LexisNexis, so no link is available. If we missed any, let us know.


Arkansas:


It shall be unlawful for any person, partnership, firm, corporation, joint-stock company, or other association engaged in business within this state to:


(A) Sell, offer for sale, or advertise for sale any article or product or service or output of a service trade at less than the cost thereof to the vendor…


California:


It is unlawful for any person engaged in business within this State to sell any article or product at less than the cost thereof to such vendor, or to give away any article or product, for the purpose of injuring competitors or destroying competition.


Colorado:


It is unlawful for any person, partnership, firm, corporation, joint stock company, or other association engaged in business within this state to sell, offer for sale, or advertise for sale any product or service for less than the cost of the product or service with the intent to both injure competitors and destroy competition and where the likely result of such sale would be the acquisition or maintenance of a monopoly.

Hawaii:


No person, partnership, firm, corporation, joint stock company, or other association engaged in business within the State shall sell, offer for sale, or advertise for sale any article, or product, or service or output of a service trade, at less than the cost thereof to such vendor, or give, offer to give, or advertise with the intent to give away any article or product, or service or output of a service trade, with the intent to destroy competition.


Idaho:


It is hereby declared that any advertising, offer to sell or sale of any merchandise, either by retailers or wholesalers, at less than cost as defined in this act, with the intent, or effect, of inducing the purchase of other merchandise or of unfairly diverting trade from a competitor or otherwise injuring a competitor, impairs and prevents fair competition, injures public welfare, and is unfair competition and contrary to public policy and the policy of this act, where the result of such advertising, offer or sale is to tend to deceive any purchaser or prospective purchaser, or to substantially lessen competition, or to unreasonably restrain trade, or to tend to create a monopoly in any line of commerce.


Kentucky:


Except as provided in KRS 365.040, no person engaged in business within this state shall sell, offer for sale or advertise for sale any article or product, or service or output of a service trade, at less than the cost thereof to such vendor, or give, offer to give or advertise the intent to give away any article or product, or service or output of a service trade, for the purpose of injuring competitors and destroying competition.

Louisiana:


Any advertising, offer to sell, or sale of any merchandise, either by retailers or wholesalers, at less than cost as defined by this Sub-part plus any state, county or municipal sales tax that is then payable under any existing law or ordinance, with the intent or effect of inducing the purchase of other merchandise or of unfairly diverting trade from a competitor or impairing fair competition and thus injuring public welfare, is unfair competition and contrary to and violative of public policy as expressed in this Sub-part, where the result of such advertising, offer or sale is to tend to deceive any purchaser or prospective purchaser, or to substantially lessen competition, or to unreasonably restrain trade, or to tend to create monopoly in any line of commerce.

Maine:


It is unlawful for any person engaged in the distribution or sale of merchandise of general use or consumption to sell such merchandise at less than the cost thereof to such vendor with the purpose or intent to injure competitors or destroy competition. Any merchandise offered for sale at a price below cost shall be prominently displayed in the outlet offering the same in sufficient quantities to meet the usual and reasonable expected demand therefor.


Maryland:


A retailer or wholesaler with intent to injure a competitor or to destroy competition may not advertise, offer to sell, or sell at retail sale or wholesale sale any item of merchandise at less than its cost to the retailer or its cost to the wholesaler, respectively.


Massachusetts:

Any retailer who, with intent to injure competitors or destroy competition, advertises, offers to sell or sells at retail any item of merchandise at less than cost to the retailer, together with any sales taxes or excises levied or imposed upon such merchandise by the commonwealth or the United States of America not already included in the invoice or replacement cost to the retailer, or any wholesaler who, with intent as aforesaid, advertises, offers to sell or sells at wholesale any item of merchandise at less than cost to the wholesaler, together with any sales taxes or excises levied or imposed upon such merchandise by the commonwealth or the United States of America not already included in the invoice or replacement cost to the wholesaler, shall, if the offender is an individual, be punished by a fine or not more than five hundred dollars or by imprisonment for not less than one month nor more than one year, or both…


Minnesota:

Any retailer, wholesaler, subjobber or vending machines operator engaged in business within this state, who sells, offers for sale or advertises for sale, any commodity, article, goods, wares, or merchandise at less than the cost thereof to such vendor, or gives, offers to give or advertises the intent to give away any commodity, article, goods, wares, or merchandise for the purpose or with the effect of injuring a competitor or destroying competition, shall be guilty of unfair discrimination; and, upon conviction, subject to the penalty therefor provided in section 325D.071.


Montana:


It is unlawful for a vendor to sell, offer for sale, or advertise for sale any article of commerce at less than the cost thereof to the vendor or to give, offer to give, or advertise the intent to give away any article of commerce for the purpose of injuring competitors and destroying competition.


North Dakota:


Any advertising, offer to sell, or sale of any merchandise, either by retailers or wholesalers, at less than cost as defined in this chapter, which has the intent or the effect of inducing the purchase of other merchandise or of unfairly diverting trade from a competitor or otherwise injuring a competitor, impairs and prevents fair competition, injures public welfare, and is unfair competition and contrary to public policy and the policy of this chapter, if the result of such advertising, offer, or sale is to tend to deceive any purchaser or prospective purchaser, or substantially to lessen competition, or unreasonably to restrain trade, or to tend to create a monopoly in any line of commerce.


Pennsylvania:


It is hereby declared that advertisement, offer to sell or sale of any merchandise, either by retailers or wholesalers, at less than cost as defined in this act with the intent of unfairly diverting trade from or otherwise injuring a competitor or with the result of deceiving any purchaser or prospective purchaser, substantially lessening competition, unreasonably restraining trade or tending to create a monopoly in any line of commerce is an unfair method of competition contrary to public policy and in contravention of the policy of this act.


Rhode Island:

Any retailer, who, with intent to injure competitors or destroy competition, advertises, offers to sell, or sells at retail any item of merchandise at less than cost to the retailer, or any wholesaler who, with intent as previously mentioned, advertises, offers to sell, or sells at wholesale any item of merchandise at less than cost to the wholesaler, shall, if the offender is an individual, be punished by a fine of not more than five hundred dollars ($500) or by imprisonment for not less than one month nor more than one year, or both; or, if the offender is a corporation, by a fine as previously mentioned.


West Virginia:


The sale of goods at less than the cost thereof results in economic maladjustments and tends toward the creation of monopolies, thereby destroying fair and healthy competition and tending toward bankruptcy among merchants who maintain a fair price policy, and is, therefore, an unfair trade practice.


Wisconsin:


The practice of selling certain items of merchandise below cost in order to attract patronage is generally a form of deceptive advertising and an unfair method of competition in commerce. Such practice causes commercial dislocations, misleads the consumer, works back against the farmer, directly burdens and obstructs commerce, and diverts business from dealers who maintain a fair price policy. Bankruptcies among merchants who fail because of the competition of those who use such methods result in unemployment, disruption of leases, and nonpayment of taxes and loans, and contribute to an inevitable train of undesirable consequences, including economic depression.

Wyoming:

It shall be unlawful for any person, partnership, firm, corporation, joint-stock company, or other association engaged in business within this state, to sell, offer for sale or advertise for sale any article or product, at less than the cost thereof to such vendor, or give, offer to give or advertise the intent to give away any article or product for the purpose of injuring competitors and destroying competition.


(Published by The Wall Street Journal – November 29, 2013)

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