Chapter F: Article 2

(b) Quantity sales shall be set up as Sponsored Sales only if the purchaser pays the publisher or publisher's agent amounts required by F 1.1 net of all other considerations. In those instances where an agent develops a sponsored sales program involving more than one publication, the sponsor must demonstrate his / her selection of the specific publications they wish to purchase. This can be accomplished by means of the agent generating invoice(s) that identify the titles, quantities purchased and purchase amount for each title.

In addition, the purchasers involved in agent developed programs must provide, directly to ABC, an attestation of their understanding of the purchase agreement and their primary business reason for making the purchase.

(c) Each household scheduled to receive a sponsored copy must have notification as to who the sponsor will be and the term the delivery is scheduled to take. Such notification should not be promotional in nature.

(d) Sponsored Sales sold on a promise-to-pay basis must be paid within four months of the start of service.

(e) Qualified purchasers of sponsored sales shall be defined as businesses or individuals having a consumer presence. Third party subscription selling organizations or other vendors to the publication circulation industry shall not be recognized as qualified sponsored purchasers.

(f) Post-expiration copies shall be excluded from paid circulation and included in non-paid distribution.

(g) Copies served to public places for use in reception areas or other public settings to be shared by multiple consumers or to be picked up by unknown users of the venue shall not be eligible to be reported as sponsored sales, but may be eligible to be reported as "verified" circulation, "analyzed non-paid bulk" or "analyzed non-paid market coverage" if distribution is in accored with the provisions of Rules F 15.1, F 13.5 or F 13.6.

(h) All copies or subscriptions purchased in quantities of 10 or less shall be designated in Bureau reports as "Single Copy Sales" or "Subscriptions: Individual" except as otherwise permitted or prohibited by the provisions hereafter stated.

(i) The average number of copies served in the period for sponsored subscriptions shall be reported separately, with an explanation in the Explanatory Paragraph that may include an optional description of the type of distribution being made (e.g., individually requested, etc.).

(j) The average number of copies served in the period from sponsored single copy sales shall be reported separately, with an explanation in the explanatory paragraph of Publisher's Statements and Audit Reports.

(k) If a magazine is the official journal of an association and the majority of the subscriptions are association, sponsored sales subscriptions may be included with association subscriptions in Paragraph 6 if the average for the period does not exceed 10 percent of the total average subscription circulation.

(l) The subscriptions involved in a quantity sale made to an individual, group of individuals or corporation, which have a financial interest in the publication, shall not be included in Sponsored Sales but shall be included in non-analyzed non-paid circulation, unless it can be proved to the satisfaction of the managing director that the sale was made for the benefit of the purchaser and not for the benefit of the publication.

(m) Subscriptions purchased in quantities by corporations, institutions or individuals for their own employees, subsidiary companies or branches are not subject to the provisions of Paragraph (a) but shall instead be judged by the rule governing Group (Mail Subscriptions Special). (See F 2.5)

(n) Copies of magazines that are distributed through redemption programs utilizing advertiser coupons are eligible to be included in paid circulation when the price paid by the purchaser (advertiser) is in accord with F 1.1. In addition, the total number to be included in paid circulation is limited to 1 percent of total circulation in the geographic area in which the coupons are distributed. Copies in excess of 1 percent of total circulation for the period in which the transaction takes place shall be included in total non-analyzed non-paid circulation. Any program involving advertiser coupons for the redemption of single copy sales must be reviewed and approved in advance by the Bureau and all copies so distributed must be fully explained in the appropriate paragraph of the Bureau Publisher's Statements and Audit Reports.

(b) To qualify, Gift Subscriptions must be paid for in accordance with F 1.1.

(c) Subscriptions which are given to promote the professional or business interests of the donor shall be reported under the rule governing term subscriptions in Public Place/Sponsored Sales or mail subscriptions special whichever applies.

(d) In no case where an order (or orders) from a single donor covers more than fifty subscriptions shall the subscriptions be regarded as Gift Subscriptions but shall instead be classified as Public Place/Sponsored Sales, provided they conform to the rules governing Public Place/Sponsored Sales.

(d) The foregoing provisions of the above paragraph (c) shall not apply to an applicant, provided that the bylaws of the association or organization provide that a subscription is part of the association or organization dues or payment of each member or contributor, and the publisher agrees at the time of making application that the stipulation as set forth will be complied with no later than the beginning of the second membership year following the period covered by the initial audit. If compliance is not accomplished within this established time limit, the publication shall be automatically dropped from membership in the Bureau as provided in 2.13, Paragraph (d) of the bylaws.

(e) Association, organization or society subscriptions shall not be credited as paid circulation unless at least one cent is paid.

(f) The amount allocated for the subscription shall be the amount used in the average price calculation.

(also see Policies and Practices, regarding Newspapers, Magazines, and Farm Publications sold with the sale of Other Services)

(a) “Partnership Sales” involve the bundling of a magazine (either a single copy or a subscription) with other goods or services. At the point of sale, the consumer must be advised that the magazine is included along with the good or service and informed of the amount allocated for the cost of the magazine. The amount allocated must be in accord with Rule F 1.1 Paid Circulation Defined.

The presentation to the consumer must position the partnered good or service as the primary item purchased. If the magazine is presented as the primary item, Rule F 8.2 Premiums with Subscriptions/Single Copy Sales will be used to qualify the sale.

The amount allocated for the subscription or for the single-copy purchase must be presented to the consumer in a clear and reasonable manner in all written documentation.

Consult ABC’s Website for specific requirements regarding notification requirements to the consumer.

(b) To qualify partnership sales as paid circulation:

(1) The consumer must be notified that the magazine is included with the bundled good or service along with the amount allocated for the cost of the magazine.

(2) The consumer must be given clear and reasonable information on how to obtain a refund in lieu of receiving the magazine. The refund must be for the same amount as the “allocated” value.

(c) Requirements
Documentation must be available for ABC auditors to confirm the order and payment of the bundled good and service.

(1) For Pre-Qualification Review:
Here are the requirements for a complete description of the bundled good or service, including the “channel” (e.g., retail outlets, mail, etc.) used for the sale. Documentation of the consumer notification, the method used for the inclusion of the magazine subscription in the purchase, the option for the consumer to decline the magazine and the refund process.

Some program elements may not be resolved when the pre-qualification review process is initiated. Once completed, they must be communicated to ABC before the program is launched.

• The planned launch date and duration of each program.
• Summary of the participation agreement between the publisher (or agent) and their partner.

For ABC Audit Standards, Sale Guidelines and examples of qualifying sales transactions as paid circulation, consult ABC’s Web site.

(d) Reporting
All partnership sales will be reported separately in ABC Publisher’s Statements and Audit Reports for subscriptions and/or single copy sales.

The value identified as “deductible” will be included in the average price calculation and indicated in the paragraph of ABC reports reporting the average subscription price.

All partnership sales are included in the “Channels of Sales” section of Bureau reports.

Details regarding all partnership sales will be provided in the explanatory paragraph. This will include program information and the selling price, or the range of selling price for the magazine subscription.

F 2.7 Club/Membership Subscriptions

For program approval and ABC Audit Requirements, consult ABC’s Web site: www.accessabc.com.

(a) “Club/Membership” is defined as a group of individuals who belong to an organization for a common purpose. The “club” either meets regularly, provides a location for members to use, or has ongoing communications with the members on a “common purpose” subject.

Club/Membership subscriptions are structured so that the magazine subscription and the related value of the magazine are presented as either deductible or non-deductible from the dues paid by the club member.

(1) The club member must be notified at the point of joining the club that a portion of their dues payment includes a subscription to the publication.

(2) The dues invoice must state the amount allocated to the subscription.

(3) The amount allocated for the subscription must be in accord with Rule F 1.1 Paid Circulation Defined and presented in a clear and reasonable manner in all written membership information.

Consult ABC’s Web site: www.accessabc.com for specific requirements regarding notification requirements to the consumer.

(4) For nondeductible only, members must have the option to “opt” out of the club/membership program, but may continue as subscribers at the same or greater price as allocated as part of the membership dues fee.

(5) For nondeductible only, the value of tangible products or services (premiums) plus the amount allocated for the subscription cannot exceed the amount charged as dues.

(6) Organizations meeting postal and federal/state tax rules as a non-profit or not-for-profit entity, will be evaluated under Rule F 2.4 “Association, Organization and Society Subscriptions.”

(b) Categories of Club/Membership Programs

(1) Deductible Club/Membership Subscriptions
The allocated amount of the subscription may be deducted from dues.

The amount of the subscription must be presented to the club member with an option to decline the subscription either by:

(a) notification on the membership dues invoice offering a reduction of dues for the allocated subscription amount, or

(b) a rebate/refund approach directly from the publication in an external communication subsequent to the membership dues being paid.

Clear and simple instructions on how to process a refund should require minimal effort by the member.



(2) Nondeductible Club/Membership Subscriptions
The allocated amount of the subscription cannot be deducted from dues.

The dues invoice must state the amount allocated to the subscription.

Members must have the option to opt-out of the club/membership program, but may continue as subscribers at the same or greater price as allocated as part of the membership dues fee.

The value of tangible products or services (premiums) plus the amount allocated for the subscription cannot exceed the amount charged as dues.

(c) Requirements

(1) To qualify as paid circulation, the following elements are required to report club/membership subscriptions as either deductible or non-deductible:

(a) For nondeductible only, the publication must be editorially homogeneous with the defining characteristics of the club/membership.

(b) Verification that annual dues were actually paid by the club member.

(c) The amount allocated to the subscription must be at least one cent.

(d) The club member must be notified of the inclusion of the magazine subscription as a membership benefit and the value assigned to it is included in dues.

(e) For Deductible Only – Verification that the club member was given clear and reasonable information on how to obtain a refund instead of receiving the magazine subscription.

(2) A program review by ABC requires:

(a) For a Classification Review:
A complete description of the club/membership program, including information regarding the benefits of the club and the manner in which the club is promoted and membership/ enrollment materials used to sell the club package.

(b) For a Pre-Qualification Review:
Documentation of the consumer notification, the method used for the inclusion of the magazine subscription in the purchase, and, for deductible club/ membership subscriptions, the option for the consumer to decline the magazine and the refund process.

(d) Reporting

All Club/Membership Subscriptions will be reported separately in ABC Publisher’s Statements and Audit Reports and noted as either deductible or nondeductible.

A full description of the club, including the benefits and, where applicable, the value of club benefits, will be provided in the explanatory paragraph of Bureau reports.

Sales identified as deductible will be included in the average price calculation and will be noted in the average price paragraph of Bureau reports.

Sales identified as nondeductible will be excluded in the average price calculation and will be noted in the average price paragraph of Bureau reports.

All Club Membership subscriptions are included in the “Channels of Sales” section of Bureau reports.

F 2.8 Subscriptions Purchased for Military Personnel

Subscriptions paid for by either a third-party individual or company for distribution to military personnel shall be considered "Subscriptions Purchased for Military Personnel" and shall be reported in Publisher's Statements and Audit Reports as permitted or prohibited by the following provisions:

(a) To qualify, subscriptions must be paid for in accordance with F 1.1.

(b) Post-expiration copies shall be excluded from paid circulation and included in non-paid distribution.

(c) The average number of copies served in the period shall be reported in the Publisher's Statement and Audit Report with an explanation in the Explanatory Paragraph.

(d) Subscriptions which are given to promote the professional or business interests of the donor shall be judged by the rules governing sponsored sales.