TRADING STAMPS - LEGALITY OF A LOCAL STORE PRINTING COUPONS IN NEWSPAPERS OFFERING A CERTAIN AMOUNT OFF THE REGULAR PRICE OF A PRODUCT NOT PRODUCED OR MANUFACTURED BY THE STORE

TRADING STAMPS - LEGALITY OF A LOCAL STORE PRINTING COUPONS IN NEWSPAPERS OFFERING A CERTAIN AMOUNT OFF THE REGULAR PRICE OF A PRODUCT NOT PRODUCED OR MANUFACTURED BY THE STORE.

It does not constitute a violation of the Washington trading stamp law for a store to issue coupons or print them in newspapers or other advertisements which offer a reduction in price on merchandise not manufactured by the issuing store.

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                                                                   June 15, 1960

Honorable Wilbur G. Hallauer
State Senator, First District
Box 70
Oroville, Washington                                                                                          Cite as:  AGO 59-60 No. 124

Dear Sir:

            By letter previously acknowledged you have requested the opinion of this office on a question which we paraphrase as follows:

            Is it a violation of the Washington trading stamp-coupon law to issue coupons or print them in newspapers or other advertisements redeemable in a reduction in price on merchandise not manufactured by the issuing store?

            We answer your question in the negative, as qualified in the analysis.

                                                                     ANALYSIS

            The coupons in question are undoubtedly subject to the provisions of RCW 19.84.010 which provides as follows:

            "No person shall sell or issue any stamps, trading stamp, cash discount stamp, check, ticket, coupon or other similar device, which will entitle the  [[Orig. Op. Page 2]] holder thereof, on presentation thereof, either singly or in definite number, to receive, either directly from the vendor or indirectly through any other person, money or goods, wares or merchandise, unless each of said stamps, trading stamps, cash discount stamps, checks, tickets, coupons or other similar devices shall have legibly printed or written upon the face thereof the redeemable value thereof in cents."  (Emphasis supplied.)

            Therefore, each such coupon issued must conform to this statute which requires the specification of the redeemable value of the coupon upon its face in cents.

            RCW 36.91.030 (1957 Supp.) provides as follows:

            "No person shall furnish or sell to another for use, in, with, or for the sale of any goods, any trading stamps, coupons, tickets, certificates, cards, or other similar devices to be used in any county, city or town in this state other than that in which such furnishing or selling shall take place."

            We assume, however, that the undertaking to issue and distribute the coupons in question is solely that of the local merchant, without outside assistance, and that the operation of the plan is to be geographically limited as provided in the above statute.

            Another possible problem arises because of the language of RCW 36.91.040 (1957 Supp.), as follows:

            "Nothing in this chapter, or in any other statute or ordinance of this state, shall apply to the issuance and direct redemption by a manufacturer of a premium coupon, certificate, or similar device; or prevent him from issuing and directly redeeming such premium coupon, certificate, or similar device, which, however, shall not be issued, circulated or distributed by retail vendors except when contained in or attached to an original package.  The term 'manufacturer,' as used in this section means any vendor of an article of merchandise which is put up by or for him in an original package and which is sold under his or its trade  [[Orig. Op. Page 3]] name, brand or mark: Provided, That no premium coupon, certificate or similar device shall be issued in connection with the sale of eggs, poultry, and the products thereof, or milk and the products thereof."

            Construed in one way, the language of this statute would appear to prohibit the distribution of trading stamps at all by retail vendors, except when contained in or attached to an original package.  This construction, however, would involve reading one limited portion of the statute out of context.  Clearly, the phrase ". . . which, however, shall not be issued, circulated or distributed by retail vendors except when contained in or attached to an original package. . . ." relates to those coupons used in connection with the exempted activity, and supplies a condition for the exemption.  Furthermore, the statute is penal, because a violation of any of the provisions of chapter 36.91 RCW is termed a gross misdemeanor.  RCW 36.91.050.  Where a penal statute is susceptible of two constructions, that construction which is most favorable to the defendant will be adopted.  State v. Anderson, 61 Wash. 674, 112 Pac. 931 (1911); State v. Eberhart, 106 Wash. 222, 179 Pac. 853 (1919).  In fact, in a previous opinion of this office we pointed out that one of the reasons for the original package exception was to protect the local merchant from the penalties of the act in situations in which he sold merchandise containing stamps or coupons placed in the packages by the manufacturer.  See AGO 55-57 No. 192, to Representative Marshall A. Neill, January 26, 1956, a copy of which is attached.

            We are satisfied that the statute last quoted does no more than permit a manufacturer of any save certain specified products to issue premium coupons which may be distributed and redeemed by retail vendors when contained in or attached to original packages.  Again, we assume that the undertaking contemplated is solely and entirely that of the local merchant.  On that assumption we conclude that the plan would not constitute a violation of RCW 36.91.040, supra.

            One problem remains, however, as to whether or not a license is required for the use of such coupons.  Section 1, chapter 134, Laws of 1913 (cf. RCW 36.91.010) provides as follows:

            "Every person, firm or corporation who shall use, and every person, firm or corporation who shall furnish to any other person, firm or corporation to use, in, with, or for the sale of any goods, wares or merchandise, any stamps, coupons, tickets, certificates, cards, or other similar devices which  [[Orig. Op. Page 4]] shall entitle the purchaser receiving the same with such sale of goods, wares or merchandise to procure from any person, firm, or corporation any goods, wares, or merchandise, free of charge or for less than the retail market price thereof, upon the production of any number of said stamps, coupons, tickets, certificates, cards, or other similar devices, shall before so furnishing, selling, or using the same obtain a separate license from the auditor of each county wherein such furnishing or selling or using shall take place for each and every store or place of business in that county, owned or conducted by such person, firm or corporation from which such furnishing or selling, or in which such using, shall take place."  (Emphasis supplied.)

            In our opinion this statute does not require a license for the furnishing or use of coupons such as those in question under the facts outlined above.  By its terms the statute refers to the use of coupons, etc., "in, with, or for the sale of any goods, wares or merchandise . . . which shall entitle the purchaser receiving the same with such sale of goods, wares or merchandise to procure any goods . . ."  (Emphasis supplied.)  Again, the statute, being penal in nature, must be construed to reach no farther than its words and a person is not to be made subject to them by implication.  State v. Eberhart, supra.

            According to the facts outlined in your letter the coupons in question would be issued freely and not with the sale of any goods, wares or merchandise.  Therefore, in our opinion, the issuance and use of such coupons would not be a violation of the statute quoted above.

            We trust that the foregoing will be of some assistance to you.

Very truly yours,

JOHN J. O'CONNELL
Attorney General

ROBERT F. HAUTH
Assistant Attorney General