Over the last few weeks, I’ve been meaning to bring this law back to the forefront. With several members having new ad directors and staff, not excluding new publishers either, we remind newspapers periodically about what’s under the general title of “Going Out of Business.” The news this week about Pier 1 Imports filing bankruptcy and announcing that at least two Kentucky stores — in Frankfort and Lexington — would be closing got me to make a reminder to use this in On Second Thought.
Call it what you want — Going Out of Business, Lost Our Lease, Moving Sale, Fire Sale, just about any kind of sale along those lines require action on the part of the business, and a publication requirement by newspapers.
None of us want to see a business closing down, that hurts the economy and often times hurts newspaper revenue.
Still, back in 1978, the Kentucky General Assembly enacted laws to ensure if these sales take place, then for the protection of the consumers, certain guidelines must be complied with.
KRS 365 is titled “Trade Practices” and much of that section covers these types of sales. I’m going to give you kind of the beginning and the end and if you or a merchant needs more information, head to the city or county attorney’s office and ask to see their Kentucky Revised Statutes books. You only need the book that includes KRS 365.
But here are the two important sections that affect the news media and all advertising:
KRS 365.415 for fire, removal, and certain other sales
No person shall advertise, represent or hold out to the public that any sale of goods is an insurance, bankruptcy, mortgage foreclosure, insolvent’s, assignee’s, executor’s, administrator’s, receiver’s, trustee’s, removal sale, going out of business sale or fire sale unless he first obtains a license to conduct the sale from the county clerk of the county in which he proposes to conduct the sale.
KRS 365.455 Posting of application for license; advertising regulations
A copy of the application for a license to conduct a sale under KRS 365.410 to 365.480 and 365.992, including the inventory filed herewith, shall be posted in a conspicuous place in the sales room or place where the inventoried goods are to be sold, so that the public may be informed of the facts relating to the goods before purchasing same, but the copy need not show the cost price of the goods. The duplicate copy of a license shall be attached to the front door of the premises where the sale is conducted in such a manner that it be clearly visible from the street. All advertising relating to the sale shall prominently state the final date of the sale and the number of the license. All such advertising shall be confined to or refer only to the address and place of business specified in the inventory as to be discontinued.
Most businesses are going to question your sanity if you tell them they have to get a license from the county clerk’s office and then if they want to advertise, they’ll have to publish the “Permit Number” in the ad. It’s not just newspaper advertising this covers but any kind of ad, commercial or sign that announces a business is having such a sale.
Extra note: This does not include any kind of court-ordered sale but those are few and far between.
Make sure the advertising staff is aware of the provisions in KRS 365 and that any ad covered in the state law includes the “Permit Number” being included.