The Competition Bureau (Bureau) recently issued a press release seeking public comments on its draft Information Bulletin on Consumer Rebate Promotions (Bulletin). The Bulletin sets out the Bureau’s proposed approach to interpreting the false or misleading representation provisions of the Competition Act (Canada) (the Act), the Consumer Packaging and Labelling Act and the Textile Labelling Act as they apply to consumer rebate offers and promotions. While Information Bulletins issued by the Bureau do not have the force of law, they illustrate how the Bureau will approach the interpretation and enforcement of the legislation that is the subject of such a bulletin.
In the Bulletin, the Bureau confirms that the misleading advertising provisions of the Act (subsections 52(1) and 74.01(1)(a)) apply to rebates. The Bulletin provides examples of 5 circumstances in which a rebate promotion could be considered a false or misleading representation:
(1) failing to clearly and conspicuously disclose all of the rebate’s conditions, limitations and exclusions. (Note that disclosure inside a product’s packaging or on the website where a consumer applies for the rebate is unlikely to constitute adequate disclosure);
(2) disguising a rebate as the sale price or regular price (e.g., displaying the “after rebate” price in the largest font in the advertisement or using the term “save” to give the impression that the price is the result of a sale rather than a rebate);
(3) failing to specify the type of rebate such that a mail-in rebate could be disguised as an instant rebate;
(4) offering a credit in gift card form to be used on future purchases and advertising the retail price as the regular price minus the value of the credit such that a consumer believes that a rebate is being offered so that the product can be purchased at the advertised price; and
(5) failing to use a transparent and efficient rebate fulfillment method. In the Bulletin, the Bureau also recommends that manufacturers and retailers take into account the ordinary selling price provisions of the Act when promoting rebates.
The Bureau will consider both the general impression and literal meaning conveyed by a rebate offer in determining whether there has been a false or misleading representation. The Bulletin outlines four best practices that manufacturers and retailers should follow to reduce the risk of making a false or misleading representation in connection with a rebate offer:
(1) clearly and prominently disclose all conditions, limitations and exclusions;
(2) show the price that consumers will effectively pay;
(3) clearly indicate the amount of the rebate that may apply; and
(4) clearly identify whether the rebate is mail-in or instant.
The draft Information Bulletin on Consumer Rebate Promotions is available here.