Jordan’s Monster Deal: Rebate or Lottery?

Boston Red Sox fans who bought sofas during Jordan Furniture’s Monster Deal last spring were sitting pretty after their team swept the Colorado Rockies in the World Series last month.

They were celebrating their team’s second championship in three years after a near century-long drought-and collecting a rebate on their new furniture.

Jordan’s proposition was straightforward: buy your furniture between March 7 and April 16, and if the Red Sox won the World Series, the buyers would get their money back. But were they betting their sofas on the Red Sox? Was it a lucky discount or an indirect lottery?

The question lingers, along with a third-party lawsuit filed against Jordan’s, alleging that the promotion was an illegal proposition.

Kenneth Florin, an attorney with New York law firm Loeb & Loeb who specializes in contest law, says the lottery implications are clear. “There’s a fine line between what is a conditional discount and a lottery,” he says. “The return on what they paid was arguably chance.”

The three elements needed for a lottery were present: a price, a prize and that element of chance. That’s what the lawsuit filed last April by Joseph Frate in Middlesex Superior Court in Massachusetts contended.

Based on a quirky state law, a third party can sue for treble damages over an illegal lottery. Ironically, Frate was on the losing end of a case in 1987 in which he was convicted of operating an illegal lottery and possessing gambling devices — slot machines.

The Massachusetts Attorney General’s office hasn’t taken any action in Jordan’s case. “We are continuing to monitor the situation and if it seems consumers are being harmed in any way, then we will reevaluate,” says Amie Breton, a spokeswoman for the attorney general’s office.

She says the offer comes down to a question of whether the buyers were really betting on anything. “The issue at hand with this particular type of promotion is that it’s hard to get in the mindset of the consumer, so we don’t know whether they’re buying the furniture to win a prize or buying furniture just to buy the furniture.”

The commonwealth’s ambivalence over getting involved in the case could be influenced by the fact that the furniture rebates don’t include the sales taxes paid by the 30,000 consumers who bought furniture during the promotion period.

Eliot Tatelman, Jordan’s owner, has been quoted in news stories saying that the firm’s lawyers determined the promotion was legal.

Jordan’s spokeswoman Heather Copelas declined to comment on the issue or the lawsuit. “We have a commitment to honor the terms of the promotion and we’re moving forward,” she says.

Jordan’s is also declining to attach a dollar figure to its take on the deal — but it did indemnify itself with an insurance policy covering an undisclosed level of risk.

Meanwhile, Copelas says Jordan’s is reaping the rewards of residual sales fueled by the Monster Deal.

Unless the lawsuit overturns Jordan’s promotional play, it could turn out to be the most lucrative furniture ploy since the Red Sox installed seats atop the Green Monster — the 37-foot high left field wall in Fenway Park that lent Jordan’s deal its name.