Report under Standing
Order No. 141
1. The Regulatory Reform Committee has examined the
draft Regulatory Reform (Trading Stamps) Order 2005 in accordance
with Standing Order No. 141. We recommend unanimously that the
draft Order be approved.
1 Introduction
2. The Department of Trade and Industry ("the
Department") laid the draft Order before Parliament on 17
January 2005, together with an explanatory statement about the
Order. We have already reported on the proposal for the Order,
which would repeal the Trading Stamps Act 1964 ("the 1964
Act") and section 1(2)(c) of the Supply of Goods and Services
Act 1982 ("the 1982 Act") so that that Act would in
future apply in situations where goods are supplied in exchange
for promotional tokens. Where goods are exchanged for both cash
and tokens, the sale of Goods Act 1979 applies.
3. Trading Stamps schemes can be defined as consumer
promotions in which customers are issued with redeemable tokens
when making purchases from participating retailers. Those tokens
can be exchanged in specified quantities for goods provided either
by the retailer himself or by the promoter of the trading stamp
scheme. These kinds of schemes have tended to be overtaken by
promotional schemes which make use of electronic loyalty cards
and the accumulation of electronically recorded 'loyalty points';
the Department believes such schemes fall outside the scope of
the 1964 Act because the Act defines a trading stamp as a physical
object. The Government's intention is to repeal the 1964 Act,
so that all customer loyalty schemes which involve the exchange
of tokens for goods are governed by a single legislative framework
in the 1982 Act.
4. The House has instructed us to examine the draft
Order against such of the criteria specified in Standing Order
No. 141(6) as are relevant. We are also required to consider
the account which the responsible minister has taken of our report
on the proposal, and of any other representations made during
the period for Parliamentary consideration. Our discussion of
matters arising from our consideration is set out below.
| 
