Category: rebates

Breaking News: Costco Sues Washington State Over Unclaimed Rebates

According to an article by Vanessa Ho in Tuesday’s Seattle Post-Intelligencer, Costco – the famous big box grocer/wholesaler – has just sued the State of Washington over $3 million in unclaimed rebates.  According to the article, Costco alleges that it should not have to turn over the amounts requested by the state because it has engaged 3rd party rebate fulfillment houses to manage its rebate programs and that it does not retain the amounts at issue.

As those in the unclaimed property field know, this is far from the first lawsuit between holders and states regarding unclaimed rebates.  In 2006, some thirty-six states, led by Iowa, sued Young America Corporation – a rebate fulfillment house – over the failure to turn unclaimed property over to the states.  That lawsuit eventually resulted in a number of settlements between the states and Young America’s customers.  We will continue to follow the developments in Washington.

Virginia Guidance Regarding "Promotional Incentives"

Now that we’re back from the holidays, it’s time for most people to deal with the unintended consequences of the gift giving season:  rebates and returns.  While the latter is generally straightforward (to the extent that waiting upon an endless customer service line is straightforward) rebates can be trickier, for both consumer and unclaimed property professional.  For the consumer, there are several different considerations, depending upon the type of rebate:  mail-in or online; cash back or future purchase; etc.  To say nothing of special forms, expiration dates, and proofs of purchase.

For unclaimed property professionals, things are similarly complicated.  In some states, such as Virginia, there are unclaimed property exemptions for rebates and other “promotional incentives.”  See Virginia Code Section 55-210.8.  However, there is generally some confusion among holders as to what these exemptions cover.  To provide some clarity, the Commonwealth of Virginia issued a memo to provide holders with guidance as to the scope of this “promotional incentives” exemption.

In sum, the memo emphasizes that no matter whether an item is labeled a “rebate” or not, holders seeking to invoke the promotional incentives exemption must meet a two part test:

1.  The incentive must be designed to influence the consumer to purchase goods and services; AND
2.  The consumer must provide no consideration, or less consideration than the value of the incentive.

The memo goes on to give a few examples of rebates that are, and are not, covered by the exemption.  Holders with Virginia rebates should read the memo in full.  For others, it is a timely reminder that labels are not determinative when it comes to unclaimed property.