Some Black Friday sales may be illegal

If you got a really good buy in a Black Friday sale, the Idaho Freedom Foundation warns that deal may have been illegal.

Foundation President Wayne Hoffman blames a law passed by the Idaho Legislature in 1939 called the “Unfair Sales Act.” Among other things, he says the law requires that retail price markup must be at least 6 percent.

And that might make some of those big Black Friday discounts illegal. Under the law, the penalty for violation is $500 for each offense and up to 6 months in prison.

Supporters of the law claimed that discount practices worked against farmers, obstructed commerce, and diverted business from dealers who maintain a fair price policy. The 1939 legislature also claimed “discounted sales result in unemployment and underpayment of employees, excessive working hours, nonpayment of taxes and economic depression.”

But Hoffman believes the effect of the anti-competitive law is the exact opposite. He worries that it’s just a matter of time before some retailer is prosecuted under the “minimum markup” law.

“I’ve said it before and I’ll say it again,” said Hoffman. “Idaho’s law is bad public policy, and recognized as a known deterrent against a free market. Wherever a law like this exists, it harms the marketplace.”

Hoffman said he’s been calling on the legislature to repeal the statute for the past 5 years.

“For a businessman to know that he can participate in a Black Friday sale without fear of government reprisal is the best Christmas present of all,” said Hoffman. “They deserve to know that their government won’t go after them if they sell a product at below cost.”