STAND. COM. REP. NO. 3428

 

Honolulu, Hawaii

                  

 

RE:    H.B. No. 1621

       H.D. 1

       S.D. 1

 

 

 

Honorable Ronald D. Kouchi

President of the Senate

Twenty-Ninth State Legislature

Regular Session of 2018

State of Hawaii

 

Sir:

 

     Your Committee on Commerce, Consumer Protection, and Health, to which was referred H.B. No. 1621, H.D. 1, entitled:

 

"A BILL FOR AN ACT RELATING TO CONSUMER PROTECTION,"

 

begs leave to report as follows:

 

     The purpose and intent of this measure is to prohibit a merchant from adopting a warranty policy that requires a customer to pay an additional fee to obtain a repair, replacement, or refund for goods returned pursuant to the warranty.

 

     Your Committee received testimony in support of this measure from the Department of Commerce and Consumer Affairs.  Your Committee received testimony in opposition to this measure from the Retail Merchants of Hawaii.

 

     Your Committee finds that many merchants have return policies that impose processing or administrative fees on consumers to effectuate a warranty claim on damaged or defective goods.  Your Committee further finds that a consumer who purchases a damaged or defective product should be able to return it for repair, replacement, or refund without having to bear additional costs.  This measure therefore prevents a merchant from adopting a warranty policy that requires a customer to pay an additional fee to obtain a repair, replacement, or refund on returned goods.  However, your Committee notes that because warranty policies are different than return policies, a clarifying amendment to this measure is needed.

 

     Your Committee additionally finds that consumers are often confused or misled by offers a franchise makes in national advertising campaigns.  Furthermore, while an advertisement may state than an offer is not available in Hawaii, this disclosure is often in tiny print and does not sufficiently inform consumers that the offer is unavailable.  Amendments to this measure are therefore necessary to ensure that consumers are sufficiently aware when an offer under a franchise's advertising campaign is not available in Hawaii.

 

     Your Committee has amended this measure by:

 

     (1)  Clarifying that a merchant is prohibited from charging a purchaser any fee, including a processing fee or an administrative fee, to repair, replace, or refund damaged or defective goods;

 

     (2)  Requiring franchisees to disclose their non-participation in advertising campaigns of the franchise in which discounts or promotions are offered;

 

     (3)  Specifying that franchisors are prohibited from limiting or restricting the disclosures related to non-participation in an advertising campaign; and

 

     (4)  Making technical, nonsubstantive amendments for the purposes of clarity and consistency.

 

     As affirmed by the record of votes of the members of your Committee on Commerce, Consumer Protection, and Health that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1621, H.D. 1, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 1621, H.D. 1, S.D. 1, and be placed on the calendar for Third Reading.

 


Respectfully submitted on behalf of the members of the Committee on Commerce, Consumer Protection, and Health,

 

 

 

________________________________

ROSALYN H. BAKER, Chair