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Consumer Coupons and Rebates
To set the policy of the Illinois Liquor Control Commission and establish the
procedures whereby coupons/rebates may be provided by manufacturers,
distributors and importing distributors to consumers through retail licensees.
It is the policy of this Commission that coupons/rebates may be given to consumers so long as such promotions are offered to similarly situated retailers
offering off-premise sales in the manufacturer’s, distributor’s or importing
distributor’s geographical areas; on a non-discriminatory basis, in direct
relation to the amount of product purchased.
Section 5/6-5 of the Illinois Liquor Control Act and this Commission’s Trade
Practice Policy TPP-1 on the “Of Value” Standard are incorporated herein by
reference. The usual manner in which manufacturers, distributors, and importing
distributors provide consumer rebates or refunds involves the use of coupons. There are two general types of coupons: “mail-in” coupons, also known as “rebate/redemption” coupons, and “cash register” coupons, also known as “instant
refund” coupons. To use the “mail-in” the consumer purchases the product for
full price from the retailer and then mails the coupon to the manufacturer,
distributor or importing distributor, with proof of purchase. The manufacturer,
distributor, importing distributor or a designated third-party mails a rebate
check directly to the consumer. To use the “cash register” coupon the consumer
presents the coupon to the retailer and receives an immediate reduction in the purchase price from the retailer. The retailer forwards the coupon to the manufacturer, distributor or importing distributor, or its third-party agent,
which directly reimburses the retailer for the value of the coupon.
Generally, the coupon is an acceptable method of brand promotion, however, such
promotion must be done in such a manner so that unfair financial advantage is
not given to any similarly situated retailer or group of retailers in a
geographical area. Providing an unfair financial advantage or distributing the
coupons in a discriminatory manner would allow the retailer using the coupons to
receive something “of value” over retailers which had not been provided with the
coupons, since customers would generally prefer to purchase an identical brand from the retailer with coupons, resulting in a price saving to the consumer. Manufacturers, distributors and importing distributors must provide similarly
situated retailers purchasing product with coupons in relation to the quantity
purchased. Thus, one retailer cannot receive a disproportionate number of
coupons per case of product, while others receive fewer per case. The practice
of unequal distribution shall be considered a discriminatory discounting program
by this Commission. The Commission does recognize quantity pricing schemes as
between on-and-off premise establishments, and such a distinction will be applied to retail coupon programs.
Due to the potential for abuse, including fraud, the redemption of coupons
without actual purchase of product, and other “of value” situations, the use of
the “point-of-sale instant refund” coupon is not allowed.
Manufacturers, distributors and importing distributors may conduct coupon
programs as follows:
- The program must be through the manufacturer, distributor, importing
distributor or a third party, usually a clearinghouse; no retailer redemption
shall be allowed.
- “Mail-in” coupons shall require proof of purchase with a dated, retail-specific receipt.
- “Instant “ coupons shall be reimbursed to the retailer only with substantiation through documentation that there has been sufficient purchase of
product to warrant the reimbursement.
- Coupons cannot be retailer specific.
- Coupons may be available in print media (newspapers, magazines etc.) but not
by direct mail.
- Coupons may be available only to adults 21 years of age or older.
- No purchase requirements may be imposed.
- Coupons must contain an expiration date.
- Commission’s rules and regulations prohibiting the giving away of alcoholic
liquor for a commercial purpose or in connection with the sale of non-alcoholic
products or to promote the sale of non-alcoholic products shall apply.
- Coupons must be made available to all similarly situated retailers in
similarly situated marketplaces in the distributors designated geographical
The Commission realizes that certain larger retailers may wish to have a uniform
coupon/rebate program which is regional, state-or-nation-wide. While the
Commission does not wish to dictate whether such business practices are
undertaken by any retail licensee, it recognizes that certain "of value”
situations may come into play with such programs, and mandatory memberships,
enrollments, or monthly fees may exclude some or all suppliers from
participation (Section 5/6-5 and 5/6-6).
Coupon programs for a specific retail licensee are allowable on the following
- Manufacturer, distributor, and importing distributor coupons may appear in
retailer-specific promotional advertisements, however, the coupons must be
capable of being redeemed at any retailer.
- The program may not be compulsory; if manufacturers, distributors or
importing distributors wish to use the retailer system, or the system of the
third-party’s with which the retailer has contracted, such participation must be
on a voluntary basis.
- Failure of a manufacturer, distributor or importing distributor to participate in the third-party’s retailer program shall not preclude such manufacturer, distributor or importing distributor from offering its own coupon
program at said retailer’s premise.
- Any booklets, leaflets, or other literature containing the manufacturer’s,
distributor’s or importing distributor’s products, and describing or promoting
the coupon/rebate program shall not be retailer specific. This requirement does
not prohibit retailer specific advertisements, flyers or circulars which are
paid for by the retailer, and which advertise, promote or contain the retailer’s
coupon or rebate for a particular manufacturer’s, distributor’s or importing
distributor’s alcoholic liquor products.
- All checks in reimbursement for coupons shall not be retailer specific, nor shall any such checks which are sent to or to be used by consumers, be redeemable only at such retailer’s place of business.
- Although coupons may combine the purchase of alcoholic products with other products, such programs may not require that the other items be
individual retailers specific, so that the purchase of an alcoholic product
which would entitle the purchaser to a specific non-alcoholic items involves
items found only at one retailer would operate as an exclusion of other
retailers, and would be the giving of something “of value” to such retailer.
Section 5/6-5 and 5/6-6 of the Liquor Control Act should be consulted for
“of value” signage and inside advertising material limitations.
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