Kansas Attorney General Opinion 1992-068

ROBERT T. STEPHAN
ATTORNEY GENERAL May 27, 1992
ATTORNEY GENERAL OPINION NO. 92- 68
The Honorable Kathleen G. Sebelius
State Representative, Fifty-Sixth District
224 Greenwood
Topeka, Kansas 66606
Re: Crimes and Punishments--Trading Stamps--Trading
Stamp Act Inapplicable to Certain Coupons and
Similar Devices; Coupons Redeemed by Retailer
Synopsis: A retailer promotion which involves distribution of
game cards to potential customers as they enter the
store whether or not those potential customers
purchase anything is not violative of the trading
stamp act since there appears to be no inducement
to buy the retailer's products in order to get the
game cards. Cited herein: K.S.A. 21-2801;
21-2802; 21-2803; K.S.A. 1991 Supp. 41-2701.
Dear Representative Sebelius:
You request our opinion regarding a proposed grocery store
promotion and whether it would violate the trading stamp act
or the cereal malt beverage act. You provide the following
information:
"The promotion would involve customers selecting seven numbers
on game cards they receive when they enter the store. Game
cards would be provided free of charge. Same rules would
inform the customer that no purchase is necessary to
participate and that free game cards will be available upon
request.

"Cards with the customer's choices marked would be fed into an
electronic scanner. The numbers chosen and other information
would be printed on those cards and the printed card would be
returned to the customer. The customer would receive, along
with the printed card, product coupons or a low-value prize.
"Each week computer generated winning numbers would be
selected and participants whose number choices matched those
numbers in proper sequence would win or share in cash prizes.
Unclaimed winnings would carry over to the following week."
You note that since the element of consideration has been
eliminated, this does not appear to constitute an illegal
lottery.
The Kansas trading stamp act generally prohibits furnishing,
upon purchase of merchandise, coupons or similar devices
redeemable in cash, merchandise or other thing of value.
K.S.A. 21-2801; 21-2802. However, K.S.A. 21-2803 sets forth
exceptions to the rule:
"This act shall not apply to any coupon,
ticket, certificate, card or other similar
device which is issued, distributed,
furnished or redeemed:
"(b) By a retailer, when such coupon,
ticket, certificate, card or similar
device is redeemable by the retailer, with
or without accompanying cash, for any
product which the retailer normally sells
in its usual course of business."
Thus, coupons, or game cards, redeemable by the grocery store
for products the grocery store normally sells are clearly not
prohibited. See Attorney General Opinion No. 89-27. The
redemption of coupons or game cards for cash raises a more
difficult question since there is no similar exception for
this.
In State ex rel. Stephan v. Pepsi-Cola Gen'l Bottlers,
Inc., 232 Kan. 843, 846 (1983), the Kansas Supreme Court held
that the trading stamp act applied to a Pepsi-Cola promotion
which involved the furnishing of bottle caps to others "at
least in part in conjunction with the sale of Pepsi-Cola
products." Thus, even though no purchase was required to

procure the bottle caps, the act's prohibitions were
nonetheless applicable. In so holding, the court relied on
the following statement of the legislature's purpose in
enacting the trading stamp act:
"'If the use of trading stamps tends to
induce persons to make purchases beyond
the limit which they would otherwise
observe, and beyond their reasonable
needs, it may be regarded as to that
extent inimical to the interest of the
public. . . .
"'The trading stamp device offers an
inducement to make purchases from the
merchant using them, which is not
connected with the merits of his goods, or
with his customers' need of them. It
lends itself readily to fostering a belief
on the part of the buyer that the stamps
cost him nothing -- that they are given as
lagniappe'" State v. Wilson, 101 Kan.
789, 799 (1917).
The act itself only prohibits distributing coupons, etc. "in,
with, or for the sale of goods, wares or merchandise." K.S.A.
21-1801. Since under the scenario you present the game cards
are presented to potential customers at the door as they enter
the store (as opposed to the check-out counter, etc.), no
purchase is necessary, potential customers are advised that no
purchase is necessary, and the promotion does not appear to
induce persons to purchase products in order to obtain the
game cards, it is our opinion that the promotion does not fall
within the purview of the act. See also State v.
American Savings Stamp Co., 194 Kan. 297, 300 (1965) (trading
stamp act is penal in nature and must be strictly construed
against the state).
With regard to the cereal malt beverage act, K.S.A. 1991 Supp.
41-2701 et seq. we are unaware of any provisions that
would preclude a promotion such as this by a retailer-licensee.
Very truly yours,
ROBERT T. STEPHAN
Attorney General of Kansas
Julene L. Miller
Deputy Attorney General
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