Dáil Éireann díospóireacht -
Thursday, 1 Nov 1979

Vol. 316 No. 7

Trading Stamps Bill, 1979: Second Stage (Resumed).

Question again proposed: "That the Bill be now read a Second Time."

Mr. Enright

There is general agreement on this side of the House about this Bill. It will have the support of almost everyone in the House. It is welcome because this is the first time any effort has been made to bring legislation before the House dealing with trading stamps. An effort is now being made to regulate all types of transactions involving trading stamps.

Up to now trading stamps have been used mainly in connection with petrol sales. They have also been used in supermarkets and shops, but the main emphasis has been in connection with sales of petrol. Since the petrol crisis and the shortage of petrol they have faded from the scene and whether they will be restored to their previous prominence is a matter for conjecture.

Some matters connected with trading stamps have been a cause for concern. This Bill makes an effort to grapple with them. For example, if a firm in a small town had the right to use a particular brand of stamps, similar type businesses were prevented from obtaining such stamps. People selling similar commodities were seriously affected in their business and the firm with the stamps could obtain a monopoly of the trading in the town. I hope this Bill will ensure that, if trading stamps revert to their former position, they will not be allowed to create a monopoly situation. If there are two garages in one town and one garage obtains trading stamps, effectively they can close down the other garage selling a similar product. This Bill makes an effort to ensure that that will not be allowed to happen, and I welcome that approach.

It could happen that major firms would come into a town and put small companies and family firms out of business. This is serious and I am glad the Bill makes an effort to prevent stamps being withheld unreasonably from businesses. I am somewhat concerned about the number of companies who will be allowed to deal in trading stamps.

The number of such companies should be limited. If too many people are dealing in trading stamps the value of the stamps may be lessened. Any company issuing trading stamps should be a reputable company with some type of major issued share capital so that the Minister can ensure that if they issue a large number of stamps the people who obtain the stamps will be able to collect the relevant items. If a person has 50 books of stamps he should be guaranteed on calling to the headquarters of the trading stamps firm that he can pick up a television set, radio, items of furniture, and so on, and that this firm are reputable and honest and can meet their commitments in full.

I am also anxious to ensure safeguards in regard to catalogues. The Minister and many people are aware that the catalogues issued by these companies have been changing with a rapidity which was causing concern. I am anxious to ensure that firms will not be allowed to change too rapidly the cash-in values of stamps. If a catalogue sets out that, say, 25 books of stamps are required in order to obtain, for instance, a certain type of lamp, this should not be changed to 35 books in a short time and 45 in a further few weeks. The values in the catalogues must be retained for defined periods. I am glad that the Bill is endeavouring to ensure this. I would like the Minister to confirm that these firms will not be entitled to change the values contained in the catalogues without the written permission of the Minister for Industry, Commerce and Energy. Too many firms were changing the values published in the catalogues too quickly, thereby devaluing the stamps. My wife and I and various acquaintances, believing that we were going to obtain something at a certain valuation of stamps, found on going to cash in the stamps that we needed more books than we had. This is a cheap way of catching people out.

This is a Bill which everybody will have to welcome. Section 9 deals with display of information in shops. Sometimes people are not aware of values and they have insufficient information about the type of goods and it is important that people be informed sufficiently on this. The Bill appears to be safe on the next point, but I would like to know if a person is prevented from obtaining cash as distinct from goods in exchange for stamps. A person who has saved, say, 50 books of stamps may decide that he is entitled to some product and on calling to apply for this may be told that there has been a massive demand for this article and that it cannot be obtained for him. It might be a set of delph specified in the catalogue at a certain value in trading stamps. I would hope that such a person can obtain money in lieu of the product that he is seeking if that product is not available. On the morning radio programmes for housewives especially we hear of people seeking the various items and being told that unfortunately there has been a massive demand for this product and the number of applications has exceeded all expectations. That is too simple and glib an answer and I hope that the company who would set out an item in the catalogue and then be unable to furnish such an item because there has been a large demand for it will be obliged to pay cash instead.

Those are the major points I wish to make. One matter which appears to be covered adequately in the Bill is that products which people obtain against trading stamps will be equal in value to similar goods which can be purchased for cash. Section 8 would appear to cover that, but I would like clarification on this point.

The Bill provides that the company must have their place of business within the State. It may or may not be within the Minister's power, but I hope that efforts will be made within the Department and also other Government Departments to ensure where possible that goods of Irish manufacture can be obtained by a person cashing in stamps. I have been amazed to discover that a sizeable proportion of the products of the firms concerned are manufactured outside Ireland. We must use all the muscle we can to ensure that the products obtained on cashing in trading stamps are Irish. The Minister should ensure that the catalogues issued by these firms include Irish-made goods. There is a duty on all of us to ensure that the goods which will be obtained are Irish made. This Bill should help in the continuation and expansion of Irish industry. This is something that we should encompass in this Bill and which does not appear to be contained in it at present. It seems that the firms must be companies within the meaning of the Companies Act, 1963 but I do not see any reference to Irish-made products being used or exchanged by the companies. These companies would be obtaining their profits in Ireland and we must use all the muscle we can to ensure that they deal in goods bearing Irish trade marks and the "Guaranteed Irish" stamp. If we can ensure that these types of products are used then we should do so.

This Bill is breaking new ground and I welcome it. I do not know if trading stamps will be around for a long time but while they are we have a duty to ensure that the people who obtain them are treated fairly. This Bill is making a genuine effort to see that that is the case. Purchasers will in most instances be able to obtain good value in most shops not giving trading stamps if they shop wisely. If there are two products on the market which are similar in every respect and two shopkeepers are selling them, the consumer is right to obtain the product in the shop which gives him or her trading stamps. Our obligation is to ensure that the person who gets trading stamps gets a commodity which is fit for the purpose it was intended for and to ensure that the value of the stamps that person obtains are not reduced on a very regular basis. The Bill goes a fair way to meet the desires I have expressed.

Mr. B. Desmond

I am entirely opposed to the Bill because I believe that the so-called practice of issuing trading stamps should be prohibited in this country. A number of countries have seen fit to outlaw this practice. Canada, Denmark and Norway were mentioned. I have an additional worry about this Bill in that it appears to give a degree of superficial legality to what I regard as the spurious operation of so-called trading stamps.

There are a number of basic questions which have to be asked about the practice. Who pays for the trading stamps? This House has a fundamental obligation to point out to the consumer that the ordinary shopper, whether it is a person going into a supermarket and buying a basketful of groceries or a person going to a petrol station and buying a tankful of petrol, pays for the stamps. The consumer pays through the nose for the trading stamps.

In practice, the retailer pays for the cost because he is wedded to a system which has control over him and he also pays for the cost of the so-called trading operation. Who makes the money? Who gains in this so-called benefit of attractive offers made to the consumer? It is quite evident that the multi-million pound international trading stamp companies make all the money. The consumer pays in the long term as well as in the short term by the increased price of the products he or she buys. I regard trading stamps as an unfair trading practice. I know that enormous political pressures are brought to bear by these companies in whatever country they operate when they point out that they employ 100 people, that they purchase goods of a high manufacturing standard and that certain retailers want to operate the stamp system. They are very plausible. These arguments are superficially very attractive but they do not eliminate the fundamental objection that one can have. There is highly competitive trading in any part of the country and customers can get value for money without the intrusion of trading stamp companies into the midst of retail transactions.

I do not believe that there is any need for trading stamps. I do not believe we would be a killjoy society or an anticonsumer society if we had not trading stamps. I do not believe we would unduly upset motorists who have to wait an extra half minute at the petrol pumps while the attendant fiddles around with a stamp machine to give them their 500 stamps or whatever they get, if we did not have trading stamps. I do not believe a cessation of the trading stamp operation would cause many tears to be shed except by the multinational companies who have specialised in this matter, notably in the UK. There is one particular company in the UK, whom I do not propose to name, who have become so successful that one or two individuals have become millionaires as a result of the rip-off from consumers. They are very persuasive and they have very good PR. They have been very good in that regard here as well.

Deputy Enright talks about the stamp companies buying Irish. They would buy Hong Kongese or Japanese if they thought they would get a foothold in any particular market and satisfy the local objections. I believe the system should be abolished.

I know the Minister of State has inherited this Bill, which has had a long and difficult gestation in the Department. The Bill is one of those classic Bills where one tells the parliamentary draftsmen to give one a Bill to deal with a particular issue and the Minister comes up with the issue. It is like the definition of a main road. The old definition was that "a main road is any road which is deemed by the Minister to be a main road". Accordingly, any trading stamp company is a trading stamp company deemed by the Minister to be a trading stamp company. One has this official idiom in the various sections in the Bill whereby a trading stamp company can only be a company in the Republic of Ireland, which is a company with a place of business within the State. It is like telling a bookie that he is running a bookie's office in the Republic of Ireland provided he has the bookie's office within the Republic of Ireland. We know that all any one of those international companies have to do is to set up a "Barry Desmond (Ireland) Limited" company and off they go trading within the State. It is a non-provision.

The Bill also states that any such company which offers goods in exchange for stamps will be required to publish a catalogue illustrating the various goods on offer. That again is really a non-provision because one cannot operate such a company without having at least the modicum of a catalogue; and such questions as whether the catalogue is kept up to date or whether it is brought periodically to the notice of the Minister for scrutiny of the situation are not major issues because the trading stamp companies have a wealth of expertise available to them. One can assume reasonably that, for instance, if 45 fairy lights are given in exchange for 45 books of stamps, the next boxes of fairy lights to be ordered from Hong Kong will contain only 42 fairy lights. It would be difficult for a consumer to be able to distinguish between the ways in which the pay-offs are manipulated.

Any shopkeeper participating in a trading stamp scheme is to be obliged to have available a current catalogue for the information of customers. I am confident that that provision will be complied with, but we know that in practice the majority of people on their way from a supermarket or on their departure from a garage do not ask for a catalogue and we can be sure that if they were to ask for one they would be asked what they were anxious about and had they not bought their commodities in that place in the first instance. Therefore, the provision that every petrol pump attendant should have a catalogue in his pocket for the benefit for any customer who might ask for one is not a provision in effect and I cannot see it being enforced.

We read in the explanatory memorandum that:

...the protection afforded to buyers under the Sale of Goods Act, 1893, is extended to gifts in exchange for stamps, to ensure that all gifts will be as fit for their purpose and as durable as similar goods purchased for cash...

All I can say in that regard is that the provision should be a lucrative source for Mr. Gay Byrne in view of the telephone lines to his programme being kept busy by people phoning to say that the goods they received were not as durable as similar goods purchased for cash. How can one operate such criteria? If, say, a person receives two dozen Arklow pottery plates for 60 stamps, the plates would need to be evaluated in terms of their cash value for the purposes of comparison. In such a case it would be necessary to ascertain the manufacturer's catalogue price. An official in the Department responsible for such operations would have to assess the value of the goods as against the manufacturer's price and then to tell the customer whether he had been cheated. This, again, would be an impossible provision to operate having regard to the wide range of goods offered by the trading stamp companies—anything from a fine looking mop to a packet of fairy lights.

If the legislation is enacted it will be fashionable and easy for the Department to say that there is trading stamp legislation which is kept under constant review and monitored regularly. But, having regard to the likely situation within the section of the Department responsible for such activity, it is difficult to visualise the legislation being operated. Presumably the relevant sections in the Department would be dealing also with a large number of other provisions relating to trade and so on and one can imagine some clerical officer placing on top of a cabinet a file marked "Trading Stamps" and referring to it only when there is the occasional complaint.

Therefore, I do not consider this to be a Bill at all. Trading stamps should be outlawed as has been the case in Canada, in Norway and in Denmark. But the difficulty is that, once these companies get a foothold in an economy, they can exert very considerable political pressure. There was an instance of this while we were in office when we were told that so many people would lose their jobs if the trading stamp companies were not allowed continue to operate.

However, it is not our job to give seeming legality to the titillation of the consumer. Unfortunately, consumer habit is an outstanding phenomenon. People tend to continue to return to the same supermarket and to continue to collect trading stamps until such time perhaps as the glove compartments in their cars overflow with these stamps and the children lay hands on them, take them home and paste them to the wallpaper. Trading stamps are usually left lying around the house until such time as people have nothing else to do but to affix them to books, perhaps when there are power cuts and the only light is that provided by a candle.

Mr. Enright

In that case most people must be up to date in the filling of their stamp books.

Mr. B. Desmond

This is all part of the age of superficial consumerism, of the plastic society and of the waste of human effort simply because some bright spark put into effect his idea of how to make a million and the trading stamp companies have made millions of pounds. Meanwhile the consumer goes into town periodically to exchange his or her stamps for alleged gifts. One wonders what value they are really getting.

Perhaps the stage will be reached soon when, after having a couple of pints in the evening, we will be handed, say, 55 trading stamps. I had an example of this trend while in Cork recently. We do not want that kind of society. There is not any need for it and neither is there a need for this Bill. Trading stamps should be declared an illegal and unfair trading practice. People should be discouraged positively from availing of these alleged offers from retailers and wholesalers. Perhaps this is not a popular line to adopt. One could always argue that the consumer is entitled to do as he or she wishes. Of course, if the consumer wishes to give £5 for a gallon of petrol, it is his privilege to do so but there is no reason for Dáil Éireann to give superficial apparent legality to the operation of trading stamps, an operation that is harmful to society, is of no real value to the consumer, causes havoc and endless disputes in the retail trade, is wasteful in the long run and simply increases the overall retail prices here. Accordingly I oppose this Bill. I do not propose to have a division on it but it should be opposed by the House because it is inherently uncompetitive and not in the national interest.

Mr. Leyden

I welcome this Bill. I am rather surprised at the approach of Deputy Desmond to the Bill and I will go into that in a moment. First, I want to congratulate the Minister of State on her initiative in bringing this legislation before the House. It is appropriate that she, as a consumer, a housewife and a mother, a person in contact with the retailers and the supermarkets, should bring forward this type of legislation; she knows the advantages and the disadvantages of trading stamps.

I regard this legislation as consumer orientated legislation and not trading stamp legislation and I am pleased that the Minister of State has brought it forward. It does not encourage the distribution of trading stamps but it certainly protects the consumer who may avail of the offers provided by the trading stamp companies. The Minister and the Government have brought forward many items of legislation which protect the consumer and it is not before time for the Government to show their concern for the most vulnerable area of society, the consumer area.

Deputy Enright's approach is to be admired. He appreciates the general features of the Bill and the points he raised are worth noting.

So far as Deputy Desmond is concerned, I was surprised at his approach because I thought he would have applauded the Bill and perhaps brought forward certain ideas which could be incorporated in the Bill. But he opposed it outright. He advocated the abolition of the trading stamp concept. Surely he must be aware of the consequences of such an approach. There are many firms here distributing trading stamps. We are all aware of one very large company who provide a good service and are providing employment in Dublin, in Cork, where employment is very important, and in Limerick and Waterford. More important, they are giving employment to the producers and small industries. Much of this company's catalogue deals with quality Irish products. Surely Deputy Desmond could not oppose a company promoting Irish goods and providing jobs throughout the country. Certainly that company are not there to provide a social service; like all firms operating in any country they are there to make a profit. This Bill regulates the profit motive and provides safeguards against exploitation of the consumer. It is a balance between abolition, which I would oppose, and no protection for the consumer. It is controlling legislation and it is the most acceptable approach because these companies are providing stable employment and promoting Irish goods.

It is interesting to note, as Deputy Desmond said and as the Minister said in her statement, that Canada, Denmark and Norway have actually banned this type of sales promotion because they found that the companies operating the scheme were not acceptable and were not providing a service. Since I became a Member of Dáil Eireann approximately two-and-a-half years ago I have never received a complaint from a consumer in relation to the goods provided by any of the trading stamp companies but it is only right that we should provide safeguards and these safeguards have been provided in the UK and in the USA.

This Bill does not interfere with the private voucher or stamp schemes, that is to say, schemes which are organised by a single retailer or supplier and under which stamps are redeemable from that retailer or supplier alone. But care should be taken to ensure that by allowing large combines or groups to promote their own stamp schemes the general principle of this Bill is not undermined. A scheme that caught my attention in the evening papers had a very attractive and costly advertisement headed "A Fistful of Dollars". That advertisement, which is being promoted by a particular firm, makes rather outlandish statements. They have that freedom but we should try to limit the freedom of those large combines to promote very attractive voucher type schemes. The statement is made:

Every $ 10 Sunshine Dollar Token is an entry form too and each Token you hold is worth 20 genuine U.S. Dollars in spending money (up to a total of $ 1,000) if you win the fabulous holiday for 4 in Florida, the million dollar playground.

So come on, get a fistful of Sunshine Dollars this Thursday, Friday and Saturday at ........................—and a fistful of savings too.

I wonder who will get the savings. Those firms are trying to attract gullible consumers who might feel that they are getting something for nothing.

The Minister could consider embodying in the Bill a section which would control or enable the Government to scrutinise or prevent that type of advertising promotion by individual firms which generally mislead the consumer. It certainly adds to the cost of consumer items. She has an opportunity in this Bill of embodying controlling legislation for all firms operating in the State for all types of promotions. I do not want to operate a complete watchdog system that would interfere with private promotions or reach a stage where firms would be afraid of advertising but at least the Department could step in and say that this type of promotion is unacceptable. It is as unacceptable as having no control over the trading stamp companies. That is an aspect of the Bill which I am concerned about and I fail to see the real advantage for the consumer in this type of promotion.

The Minister is well aware of the need for consumer protection and is carrying out her brief very well. I suggest that she should consider some controlling measure. From the point of view of the trader or consumer trading stamps are not, on the whole, great value.

Though I agree with the Bill I would not accept the approach of Deputy Barry Desmond and the abolition of the trading stamp companies. One such company is supplied by 70 Irish manufacturers and by another 20 firms which have Irish connections. It is easy to realise the effect of a ban on all trading stamp companies on their employees and the resultant possibility of redundancies in the manufacturing firms. It is fortunate that Deputy Desmond is not sitting in the Minister's place and that we have a Fianna Fáil Government who will protect the people with sensible and practical legislation. Deputy Desmond's approach seems to be contrary to the employment policy of the Labour Party. I know that the Minister would not bring forward that kind of legislation because it is not our type of policy, though it seems to be the policy of the so-called socialists. Deputy Desmond was not a Minister in the Coalition Government and I do not know if they were aware of his views. I am surprised that he holds such extreme views regarding consumer legislation and I cannot understand his approach.

I am not advocating the trading stamp type of operation. Let the people decide whether they want such stamps. It is not our job as legislators to ban these operations. We must, however, ensure that they are controlled. These stamps are not very good value because the retailer has to increase his costs by 2½ or 3 per cent to cover his outlay on stamps. It is not possible to get precise figures as to the number of stamps which are not redeemed, but based on information I have obtained I calculate that this would amount to 50 or 60 per cent. I would ask the trading stamp companies to contradict those figures if they are not accurate.

Traders must pay for stamps on receipt and the companies have the use of that money until such time as the consumer cashes in the stamps. The trader naturally expects a certain advantage because of increased sales but in many cases these increased sales are at the expense of other traders in an area. Many retailers have decided that trading stamps do not represent good value and have decided not to proceed with them. However, the final decision rests with the consumer.

When a trading company come into an area they are quite selective in their approach. They give a retailer exclusive rights to their stamps while the contract is in operation. Many housewives are interested in collecting trading stamps because they can exchange them for luxury items which they would not normally buy. They may feel they are getting something for nothing, though they must pay in some way for it. The trading companies benefit by the fact that many people do not bother to keep their stamps, but it must be noted that the retailer has already paid for them. It is an important part of the Bill that the redeemable value of the stamps should be clearly indicated and people may take more care of the stamps when they are aware of their real monetary value. Some people may be under the impression that retailers obtain stamps very cheaply but, in fact, they are quite expensive and many retailers find it difficult to carry on. During the petrol crisis all the petrol companies banned the use of trading stamps because they could not afford them during the period of scarcity. Some of them have restored stamp promotions since supplies became available but they have limited the number of stamps given to customers. Another part of the Bill deals with the larger companies who have licensed retail outlets for petrol and insist on stamps being given to customers. The Bill makes provision to prevent this and that is welcomed.

The Post Office have their own savings stamps where the minimum is 10p. Perhaps the new board would consider the provision of special savings stamps for sales promotion. Perhaps they would see in this Bill an opportunity to increase their sales while providing a useful method of saving for the consumer.

They could provide stamps of 1p or 2p and these stamps could be given for a certain number of purchases at grocery and retail outlets. The stamps would be legal tender, cashable at 2,000 sub-post offices and in other retail outlets and there would be no control over where the consumer bought his goods. I think there is a certain merit in my suggestion and I suggest that the new board give consideration to it. It would give extra funds to the Post Office and would provide a facility for the elderly and for other people to save.

Mr. Enright

Surely the Deputy is not suggesting that the Post Office should involve themselves in the same line as trading stamps?

Mrs. Geoghegan-Quinn

The Deputy is not being fair. He was not interrupted when he was speaking.

Mr. Leyden

I am throwing out an idea which the Post Office board might like to consider. Deputy Enright does not appear to like my suggestion, but this is the place to discuss ideas that might be of benefit to the people and I make no apology for doing so. When I was young I bought 10p stamps every week and saved a few pounds. I do not see anything wrong in the State being involved through the Post Office and I wonder why Deputy Enright considers it repugnant. If there is anything wrong with what I have suggested there must be something wrong with the trading stamps system as such. We are downgrading the whole system if we say that the State could not see some worth in a saving promotion through retail outlets. What I have suggested would be acceptable under the terms of the Bill. Many benefits would accrue if we had that type of system in operation. There would be freedom of choice. If people knew that the State was backing a certain scheme and that the stamps could be regarded as currency, they would have respect for it. If I had a few retail outlets I would give consideration to the suggestion.

In the case of one stamp company it takes £38 of groceries to fill one book of stamps and that is quite a considerable amount of money. It is vital when a person goes to obtain goods for the books of stamps that he gets equal value. This legislation ensures to a great extent that the consumer will get good value. It gives the Minister and the Department tremendous power to supervise companies, to see that they give good value and do not operate restrictive practices. Since this legislation was proposed some of the more reputable companies have adapted their schemes to some extent to bring them into line with some of the proposals in the Bill. For instance, in one of their recent catalogues one firm will allow consumers to make up the balance if they have not collected enough stamps. However, that also has certain dangers and it is vital for the Minister to ensure that there is price control in respect of all the items advertised in the colourful and glossy brochures. As Deputy Enright said, there should not be fluctuating value for stamps. If it takes ten books today to get a certain item it should not take 12 books to obtain the same item tomorrow. Some companies have the value stated on their stamps, but they should go even further and give in their catalogues the actual cost of the item. This legislation will allow the Minister, by regulation or otherwise, to ensure fair play and a good return for the purchaser of the stamps. That is an acceptable approach.

The legislation before us is timely and I regret that the Labour Party will oppose it. I cannot see the reason for this or understand the ideology behind that opposition. They seem to be opposing it merely for the sake of opposition. I cannot see anything objectionable in the Bill. It is giving power to the Minister that has not existed up to now. When we get to the stage that we bring forward a Bill to regulate a scheme that has been operating since the foundation of the State, the first piece of legislation which deals with trading stamps, surely every sensible and practical Member would applaud the efforts of the Government and the Minister to draft this type of legislation. I appreciate that it is difficult legislation to draft because it entails detailed consideration of many matters. I would encourage the Minister to leave it as open and as broad as possible to ensure that she would have wide powers to control not only trading stamp companies but also the internal stamps or "offers" made by very large supermarket chains. Perhaps the Government and the Minister could incorporate some regulation in the Bill giving the type of power that would ensure they could be a consumer watch-dog to ensure that consumers obtain value for money, as they are entitled to.

It is a very useful Bill; it is complex and detailed and I congratulate those who drafted it on their foresight in including so many useful provisions. Section 3 tackles the problem of the unreasonable withholding by a company which promotes a trading stamps scheme of a supply of trading stamps which will be an unfair practice within the meaning of the Restrictive Practices Act, 1972. The section does not judge what is unreasonable; determination of this clearly depends very much on circumstances of individual cases. By the operation of the investigative machinery available under the Restrictive Practices Act the differing circumstances of different cases can be taken fully into account. That is a very reasonable approach. It gives the retailer an opportunity to go before the Restrictive Practices Commission and say he has been unfairly treated by a particular trading company and that he is having difficulty as a result of restrictive practices. Then, as the Bill states, each case can be judged on its merits. This is certainly worth while.

Sections 4 and 5 deal with the notion of a cash option. This option has two main objectives. First, it provides an indication of the value of the stamps thus aiding rational comparison with the value of goods offered in exchange for stamps. Secondly, it offers a stamp holder the right of choosing between redemption for cash or for goods. This section will create certain worries for the trading stamp companies because to date you must accept goods for your stamps but to be in a position to choose cash rather than goods would be a very useful departure which would provide the consumer purchasing goods and obtaining stamps with a very useful option.

Under section 4 the Minister may by order prescribe the value to be specified on the face of the trading stamp. The alternative would be to leave the option entirely to the stamp company to decide on the cash value. If this were done an artificially low value could be fixed. Therefore, it is important that a corrective power be available to meet the situation. That also is a very useful provision giving the Minister the powers deemed necessary. Under section 5 the holder of trading stamps is enabled to recover the value of stamps as a simple contract debt in any court of competent jurisdiction, where a stamp trading company fails to redeem the stamp for cash. This is a much more realistic and effective formula from the stamp holder's viewpoint than would be the creation of an offence for the stamp trading company in such circumstances. If the stamp-holders wish to obtain cash in exchange for stamps there is now an unequivocal statutory right to sue for that purpose.

I welcome the introduction of such useful legislation and I congratulate the Minister who has brought in so much useful consumer legislation since she became Minister of State. All housewives in the country would also certainly congratulate her on her initiative and on introducing such useful legislation.

Mr. C. Murphy

I should also like to congratulate the Minister on the great amount of consumer legislation introduced. We live in an era of the consumer society where people demand certain legislation. It is a complex area and certain tactics and shrewdness have to be adopted. The Minister and the Department are working to a certain scheme. If one considers just the aspect of trading stamps one notes two diverse situations. There are those who are completely in favour of stamps and those who are completely against trading stamps. The Bill strikes a happy medium in that it opts for regulation rather than prohibition. It has not come suddenly out of the blue but it is a matter the Department have been examining for years through the Fair Trade Commission and the Prices Commission. The Prices Commission have moved from the original stance to a situation now which brings about what I would call an Irish solution to an Irish situation. The situation needs clarification and regulation. This Bill will improve the position. It will regularise it, allow for proper development and will also take cognisance of the fact that the consumer society in Ireland is a shrewd society knowing a fair amount about the concept of value for money. The Minister expressed this view in her speech and has taken cognisance of it. I endorse that view. The public generally have this shrewdness and common sense and they will appreciate the main elements of the Bill which aims at a three-fold objective—to regulate the issue, use and redemption of trading stamps; to regulate the business of issuing and redeeming the stamps and to provide for other connected matters.

We have had diverse views on the matter. One particular brand of stamps used be very much in the news. Circumstances in the domestic and international markets caused a decline in emphasis on stamps and the situation seemed to have eased and became less obvious. With that easing people have a tendency to forget and no longer were the positions polarised because of the oil situation and people moved away from really strongly held views, but the Department did not move away from them; they continued working towards this Irish solution and this Bill is a fine example of bringing the matter to its logical and reasonable end. I do not intend to delay the House in this matter. I am very pleased with this legislation and with the fact that even though the issue went somewhat off the boil the Department continued to tackle the problem and found a solution.

An Ceann Comhairle

The Minister to conclude.

Minister of State at the Department of Industry, Commerce and Energy (Mrs. Geoghegan-Quinn)

I wish to thank the Deputies who saw fit to come into the House and debate the Second Stage of this Bill. I am glad that at least the last Deputy to speak appreciates that the problem of trading stamps did not disappear with the worsening of the oil situation in the recent past. All of us realise that the vast majority of those trading with these stamps and the vast majority of retailers to give trading stamps are involved in the oil industry, petrol retailers and so on. As a result of this oil crisis, trading stamps have virtually disappeared and are no longer available at petrol stations. Some think this is a good thing and some think it is not; it is not for us to decide that point. It is for us to legislate for the possibility of things improving in the next few months or years, when stamp trading will again become the lucrative business it was. I thank Deputy Murphy for appreciating the fact that the Department officials did not decide to shelve the draft legislation that was being examined at the time, but went ahead with the legislation to ensure that consumers will be protected and that certain protections will be there for retailers also.

I appreciate that Deputy Desmond has a blind spot where trading stamps are concerned and that, if he were in my position, he would possibly ban them altogether. His views on the Bill were approached in that light. He was picking out all the loopholes that he saw in the Bill and I will deal with his comments as I go along.

The reasons for the introduction of the Trading Stamps Bill were touched on in my speech on Second Stage. We opted in the Bill for regulation of trading stamps rather than absolute prohibition. Deputy Desmond rightly made the point that in some countries they have been prohibited, which he felt was a better idea. Equally, it is right to mention that some countries, for example, some of the States of America and our nearest neighbour, the United Kingdom, opted for regulation rather than absolute prohibition. Our legislation was brought about, first, because a very close study had been done for many years by the Department on the trading stamp business as it developed. One of the findings in favour of regulation was that it was very often the features of the trading stamp scheme rather than the scheme itself that created certain problems.

In 1971 the whole question of the trading stamp business was examined by the Fair Trade Commission, as it then was, during the public inquiry into the grocery business. Though the commission's report of July 1972 following that inquiry made no recommendation in the matter, the view was offered that trading stamps were an undesirable method of sales promotion and an unsatisfactory method of saving from the consumer's point of view. In their report of November 1972 the National Prices Commission recommended that the Minister explore the possibility of doing exactly what Deputy Desmond recommends and legally prohibit trading stamps. The commission felt that this was an unsatisfactory method of saving and created difficulties, which inevitably it does, for certain retailers and, indeed, for consumers. In May 1973 the National Prices Commission recognised the legal difficulties of providing legislation which would ban stamps and recommended instead a higher cash redemption value for stamps and also recommended that advance notice should be required if changes in catalogues were to be made.

Deputy Leyden read out an advertisement which has been appearing in some of our papers in connection with a scheme offered by one of the multiples. His positive point as regards the advertisement was that it was misleading. The Director of Consumer Affairs would be very interested in that matter. Under the Consumer Information Act which sets up the office of the director he has specific powers in relation to misleading advertising. If he has not done so already, the fact that this advertisement has been mentioned here will interest him to ensure that whatever appears in the advertisement will not mislead the public.

Retailers' and suppliers' own schemes have been excluded from the provisions of the Bill because they have limited scope. This type of scheme is redeemable from the retailer or supplier only, for either cash or goods. Because of its local nature, holders of stamps can make a direct comparison between stamp values and prevailing prices in the shops or chain concerned, or in respect of the supplier's product. These direct comparisons are relatively easy to make.

In so far as stamp trading can be argued to be a legitimate competitive tool for a retailer, the scheme operated by a supplier, or within a chain, by retailers themselves, comes closest to being a legitimate competitive tool. The benefits from this type of limited trading accrue to the retailer himself, as compared with the operations of a stamp trading company. Such companies are creaming the profit. There is a third party involved, the stamp company operating within the State; the retailer through whom the company operates the scheme and, finally, the consumer who probably suffers most.

Debate adjourned.

The Dáil adjourned at 5 p.m. until 11.30 a.m. on Thursday, 8 November 1979.