TRADING STAMPS REDEEMABLE IN GOODS, WARES AND MERCHANDISE

TRADING STAMPS REDEEMABLE IN GOODS, WARES AND MERCHANDISE.

Coupons redeemable in cash or credit are not "goods" within the contemplation of the statute and thus no license is required for the use or issuance of such coupons.

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                                                                 February 2, 1951

Honorable Albert D. Rosellini
Senator 33rd District
1111 Smith Tower
Seattle 4, Washington                                                                                             Cite as:  AGO 49-51 No. 443

Dear Sir:

            You have requested our opinion as follows:

            Do coupons, issued by merchants, which may be redeemable in cash or redeemed for credit toward the purchase of a ticket entitling the holder to passage on a carrier, come within the provisions of RCW 36.53.01 [[RCW 36.91.010, now later codified as RCW 19.83.010]], (Rem. Rev. Stat. 8359)?

            Our conclusion is that coupons redeemable in cash or credit are not "goods" within the contemplation of the statute and thus no license is required for the use or issuance of such coupons.

                                                                     ANALYSIS

            The facts you have given us are substantially as follows:  In a short time there will be offered to the merchants throughout the country a new type of trading stamp known as "Travelfares Stamps," and various merchants in the State of Washington have expressed a desire to use these stamps as an advertising medium and trade stimulus for both the merchants and the travel agencies.  Travelfares stamps will have two stated cash values:  three (3¢) cents for travel when presented to a passenger carrier; two (2¢) cents when presented to Travelfares, Inc., or the trustee bank for nontravel redemption.  If a holder desires transportation a carrier will allow the higher travel  [[Orig. Op. Page 2]] value, providing a ticket is purchased.  This is the carrier's consideration for accepting them.  If a holder desires money, it may be obtained through issuers or from the trustee bank direct at the lower cash value.  Thus, Travelfares stamps are presented to a passenger carrier in lieu of United States currency.  They are as readily converted to cash as any check, money order or sight draft.

            RCW 36.53.01 [[RCW 36.91.010, now later codified as RCW 19.83.010]], provides:

            "Every person who uses, or furnishes, or sells to any other person for use, in, with, or for the sale of any goods, any trading stamps, coupons, tickets, certificates, cards, or other similar devices which entitle the purchaser to procure any goods free of charge or for less than the retail market price thereof, upon the production of any number of such trading 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 from which such furnishing or selling, or in which such using shall take place."  (NOTE: The codifier deleted the words "wares and merchandise" appearing in chapter 134, Laws of 1913 (Rem. Rev. Stat. 8359), but it is our opinion that this deletion has no effect on our conclusion herein.)

            The only question here is whether cash and credit constitute "goods" within the above cited section.

            As to "credit" this office, in an opinion to the Prosecuting Attorney of Snohomish County dated April 4, 1928, held that the issuing of "bank credits" would not constitute "goods, wares or merchandise" within Rem. Rev. Stat. 8359.  In that opinion the scheme was as follows:

            "'* * * Each purchaser at a store issuing "bank credits" is given a blank book and upon each cash sale the customer is given stamps to  [[Orig. Op. Page 3]] the amount of two per cent of the purchase which are pasted in this book and then the book is placed in the bank by the customer and a savings account credit given for the value of the stamps in the book.  The stamps can also be converted into cash at the bank.'"

            We feel there is no substantial difference between the device described herein and the "bank credit" scheme approved in our opinion cited above.  Consequently, we hold in the instant situation, "Travelfares Stamps," when presented to a carrier amount to nothing more than extending a credit which may be applied to the purchase of passage on a carrier.

            As to the situation where the coupon holder desires to redeem his coupons in cash at the trustee bank, we have no hesitancy in concluding that cash does not constitute "goods, wares or merchandise."

            Based on a Trading Stamp statute nearly identical to our statute cited above, the North Dakota Supreme Court in Olson v. Ross, 167 N.W. 384, held that stamps redeemable in cash do not constitute "goods."  Consequently, we feel that the above case upholds our conclusion, and thus where trading stamps or coupons are redeemable in "cash," no license is required for their issuance or use.

Very truly yours,

SMITH TROY
Attorney General