Rain Check

DEFINITION of 'Rain Check'

A rain check is a promise or commitment from a seller to a buyer that an item currently out of stock can be purchased at a later date for the current day's sale price.

The term originated in baseball in the 1800s. Spectators who attended games that were postponed or canceled because of weather could receive a check to attend a future game.

BREAKING DOWN 'Rain Check'

A rain check most commonly refers to a form of deferred compensation in grocery retail environments. When advertising a sale, a retailer is required to honor the discounted price of a product even when supplies run out. Customers can request a rain check — usually a paper voucher — if they are unable to purchase the advertised item during the sale period. The rain check ensures customers have the option to return and buy the item at the discounted price when inventory is restocked. However, retailers do not have to issue rain checks if the advertisement clearly states that supplies are limited or only available at select locations.

The Federal Trade Commission "Unavailability Rule"

After 1989, rain checks became a standard practice in grocery stores because the Federal Trade Commission (FTC) established the "unavailability rule." This federal law entitles consumers to receive rain checks, substitutes item of equal value or alternative compensation equal to the advertised items or discount.

The unavailability rule protects consumers from false or deceptive advertising by requiring grocery retailers to stock enough supplies to reasonably satisfy the anticipated demand for a sale. The FTC established this law to prevent bait-and-switch sales — the practice of advertising bargain prices to attract heavy traffic while understocking the sale items to encourage customers to buy more expensive products. Running out of inventory is not illegal, but a retailer may violate the law by repeatedly understocking sale items without informing the public that quantities are limited.

Exceptions to Rain Check Laws

Individual states have their own consumer protection acts, which may expand the liability of retailers or subject a wider range of products to rain check laws. Some states limit the amount of time consumers have to redeem the rain check once they are notified of a restocked item.

Generally, rain check laws do not apply to products that are not delivered at the time of purchase, such as appliances and furniture. Large high-ticket items are regularly stocked in small quantities and may require substantial handling costs for retailers to keep more quantities at the store. Close-outs, clearances, seasonal sales and store-wide discounts are commonly excluded, as the retailer is often selling off inventory that cannot be restocked within a reasonable time frame.

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