Posted on | January 3, 2013
Written by | Keven Danow
In general, a retailer may not accept a gift or service from a wholesaler or a supplier. There is a short list of exceptions among which are inside signs and retailer advertising specialties.
An “inside sign” includes posters, placards, designs, mechanical devices and window decorations which bear advertising matter. By definition, signs may have no value to the retailer except as advertising. A three-dimensional item, such as a statue, which has no value to the retailer other than advertising, will also qualify as a sign. A supplier or wholesaler is permitted to furnish, give, loan or sell signs to a retailer. The wholesaler is not permitted to pay the retailer for the privilege of hanging the sign.
Like inside signs, the wholesaler or supplier may give the retailer dummy display bottles, provided the bottles are five gallons in size or less and bear federally approved labels as well as a label stating the bottle is for display only.
A “retailer advertising specialty” is an item which has permanently affixed advertising matter and is primarily valuable to the retailer as point of sale advertising, but which has some secondary value to the retailer in connection with the operation of its business. Examples are thermometers, clocks, mirrors and calendars. The total value of retailer advertising specialties furnished to a retailer may not exceed $200 per brand in any calendar year.
A supplier or wholesaler is permitted to set up window displays for a retailer. In creating a window display, the supplier or wholesaler is not permitted to give the retailer any item of value unless the item also qualifies as an exception to the gift or service rules. Consequently, the supplier or wholesaler is not permitted to place an item in the retailer’s window unless the item is of de minimis value, qualifies as a retailer advertising specialty, or qualifies as a sign.
Remember, the violation is reciprocal. What the supplier and wholesaler are not permitted to give, the retailer is not permitted to accept.
It is not legal for a wholesaler or supplier to place an item of value in the retailer’s window which does not feature conspicuous brand advertising permanently attached. Even with conspicuous advertising, items that are either not primarily valuable as point of sale advertising or have a secondary value that is not related to the retailer’s business may not be placed in the retailer’s window. Such things as sleighs, hockey sticks, baseball gloves, bats and helmets or barbecue grills must be rendered permanently valueless. It is not sufficient to remove a part that can easily be fixed or replaced.
Everyone involved in rendering an item valueless must make certain it will not be misused. Taking the protective cushioning out of a helmet may render it valueless, but it will also make its use dangerous. Care must be taken so that such a defective helmet has appropriate warning labels.
I wish you all a happy, healthy and prosperous New Year.