FOR YOUR INFORMATION............................October 7, 1988


     The Federal Trade Commission staff has said it supports
efforts by the New Jersey Division of Consumer Affairs to ensure
that the term "new" is not misused in advertisements or sales,
causing consumer injury.  However, the FTC staff noted that the
rule proposed by the Division may be overly broad, in some
instances prohibiting non-deceptive competitive activity. 

     The comments by the FTC staff are in response to the New
Jersey Division's notice of proposed rulemaking.  The proposed
rule would prohibit the advertising or selling of any merchandise
as new when it has been "previously owned, leased, used, damaged,
repaired, returned, operated, or used as a floor model or
demonstrator."

     The FTC staff urged the Division to consider whether the
proposed rule's broad applicability and uniform definition of
"new" may have an adverse effect on the important and useful
role of retailers' return policies in the marketplace.  In
addition, the proposed rule may be particularly prejudicial to
mail order companies and their patrons, the staff stated.

     The FTC staff suggested the Division may wish to limit
regulation of use of the term "new" to specific factual situa-
tions where evidence of consumer injury exists.  In addition, the
Division may want to define the word "new" in a way that protects
consumers from unwitting purchase of devalued merchandise without
limiting their ability to utilize return policies or the
convenience afforded by mail order purchasing, according to the
FTC staff.

     These comments are the views of the staffs of the New York
Regional Office and the Bureau of Economics.  They are not
necessarily those of the Commission itself or any individual
Commissioner.

     Copies of the letter are available from the FTC's Public
Reference Branch, Room 130, 6th St. and Pennsylvania Ave. N.W.
Washington, D.C. 20580; 202-326-2222; TTY 202-326-2502.

                              # # #

MEDIA CONTACT:  Dee Ellison, Office of Public Affairs,
                202-326-2177
STAFF CONTACT:  Michael Joel Bloom, New York Regional Office,
                212-264-1207                         [NJNEW]