The UK Government has been saying for years that it plans to repeal the unknown, unwanted and un-enforced Trading Stamps Act 1964. Now at last this could be a reality.
Repeal of the Trading Stamps Act 1964
One of the first "Preview" items reported on marketinglaw.co.uk on launch in late 1999 was the Government's proposal to scrap the 1964 Trading Stamps Act. Now, getting on for four years later, the administration finally appears to have got serious about this.
In May 2003 it published a consultation document suggesting that the 1964 statute be swept away. The 1964 Act was originally passed to control and regulate the activities of those running trading stamp schemes. In these loyalty schemes from another era, stamps were issued with retail purchases. Customer who had collected sufficient stamps exchanged them for goods from the relevant retailers or in showrooms operated by the scheme's promoters.
The 1964 Act set out a number of requirements on trading stamps scheme operators and participating retailers. These were designed to deal with concerns about a lack of transparency about who was running the schemes and the perceived risk to customers of exchanging trading stamps for goods of doubtful value and quality.
The 1964 Act required that advertisements by trading stamp scheme promoters or retailers should not convey the cash value of a stamp in terms which associated the worth of the stamp with the amount of the expenditure needed to obtain it. Such statements were also required not to be misleading or deceptive. These provisions targeted advertisements offering for example, "£1 worth of additional stamps free when spending £1 or more". Other rules required information about the trading stamp promotion to be displayed in all retail outlets in which such promotions were being run.
Other provisions related to the terms upon which goods were supplied in return for accumulated stamps. Before the '64 Act, there were no terms implied by statute in relation to goods which were supplied without money being exchanged. The 1964 Act therefore implied warranties as to title, quiet possession, freedom from encumbrance and satisfactory quality.
Separately, and perhaps in the only provision of the 1964 Act which continued to be observed by some at least, there were rules as to the redeemability of stamps or vouchers for cash.
The idea was that trading stamp schemes should be transparent. Accordingly the 1964 Act required that stamps should be redeemable for cash and that the cash value of each stamp appeared on its face. It was further provided that once the face value of accumulated stamps amounted to 25p or more, that value should be obtainable, in cash, by handing the stamps in at the offices of the promoter. This was a right which could not be excluded by small print, and it is still observed by responsible promoters, aware that it applies to any voucher, stamp, docket or other chit issued in connection with a purchase. It is for this reason that the strange legend "Cash value 0.0001p" appears on money off next purchase vouchers, for example.
What will change:
The electronic element of today's loyalty schemes falls well outside the definition of "trading stamp" in the 1964 Act, which only applies to physical vouchers. Accordingly the government's view is that virtually the whole 1964 Act should be repealed. All that will survive will be the remedy for unsatisfactory quality goods that are acquired through loyalty schemes. This will continue to apply by way of amendments to the 1982 Supply of Goods and Services Act.
Responses to the consultation document are requested by 20 August 2003.
The idea is that the repeal and amendments to the 1982 Supply of Goods and Services Act are effected through a "Regulatory Reform Order" under the Regulatory Reform Act 2001. No target date for this has been given, but the DTI proposes that "the changes are implemented as soon as practicable".