Commissioner's Opinion No. 73 / 1LF

State of California Department of Corporations

Brian R. Van Camp, Commissioner
In reply refer to: File No. _____

This letter is not an Interpretive Opinion for the reasons stated below.

Mr. Jay W. Heckman
Attorney at Law
Miller & Heckman
1 Wilshire Building
Suite 711
Los Angeles, CA 90017

Dear Mr. Heckman:

The request for an interpretive opinion contained in your letter dated January 30, 1973, has been considered by the Commissioner. Your letter raises the question whether Akra Industries, Inc., a California corporation ("Akra"), if it engages in the activities described by you, is a trading stamp company within the meaning of Section 17754, Bus. and Prof. Code Please understand that this letter is not an interpretive opinion, because the Trading Stamp Law does not contain a provision comparable to Section 25618, Corp. Code, authorizing the Commissioner of Corporations to issue interpretive opinions.

You have represented that Akra is primarily engaged in the manufacture and sale of trading stamp dispensers used by retailers to dispense Blue Chip and other brands of trading stamps. At the present time, Akra has no responsibility for the purchase, distribution or redemption of trading stamps. Akra proposes to sell and lease so-called "Return-A-Cart" units to be installed at food and merchandise markets utilizing metal shopping carts. The unit will dispense a coupon when a shopping cart is returned to the store and pushed through the unit. The redeemable value of the coupon. will be printed on each stamp in cents, mills, or fractions of cents in accordance with Section 17759(b), Bus. and Prof. Code, Merchants may print and dispense their own coupons or purchase for cash "Return-A-Cart" coupons from Akra.

Section 17754, Bus. a and Prof. Code, defines "trading stamp company" to mean any person engaged in any manner in distributing trading stamps for retail issuance by others or in redeeming trading stamps for the retailers. Section 17750 defines "trading stamp" to mean any stamp or similar device used in connection with the retail sale of merchandise or service, as a cash discount or for any other marketing purpose, which entitles the rightful holder, on its due presentation for redemption, to receive merchandiser service or cash. Section 17752 excludes from this definition coupons, caused to be prepared by the merchant using the same and distributed by him to his customers, which are redeemable only by such merchant for or in connection with the purchase of specific articles of merchandise carried in his stock.

You have represented that the retailers only will be responsible for the redemption of the coupons. You have further represented that Akra only causes stamp coils to be printed at the request of the individual retailers and is engaged solely in the cash sale of the stamp coils to the retailers. The sole responsibility for the distribution and redemption of the trading stamps would be that of the retailer.

Assuming that Akra is only printing the stamps at the request of the retailer and Akra's name does not appear on t:he trading stamps and assuming that Akra is in no way responsible for the redemption of the trading stamps, it is our opinion that Akra is not a "trading stamp company" within the meaning of Section 17754, Bus. and Prof. Code. We express no opinion concerning the application of the Law to merchants distributing the coupons.

Dated: San Francisco, California
May 30, 1973

By order of
BRIAN R. VAN CAMP
Commissioner of Corporations

By __________________
J. DOMINIQUE OLCOMENDY
Supervising Corporations Counsel
Office of Policy