§ 30-2. Endless chain business.

(a)

Prohibited. It shall be unlawful for any person to carry on in the city an endless chain retail merchandising store or business of any kind.

(b)

Scope of section. Such a business is defined as:

(1)

One where the dealer sells to a customer for a certain sum a contract with coupons or contracts attached, for a stated value, but authorizing the customer to sell these coupons or contracts at the stated value and giving each purchaser thereof, in turn, the right to apply to the dealer and buy a similar contract and pay a similar sum and receive similar coupons or contracts and, in turn, to conduct the sale of the contracts as an endless chain; provided, that when any customer has bought a contract and has sold the coupons or contracts to different individuals, as stated in this subsection, such customer is entitled to a receipt for the full amount of those coupons or contracts upon the merchandise handled by the dealer.

(2)

As including a business where the purchaser makes an initial payment and is thereafter allowed commissions on a stated number of resulting sales subsequently made on leaflets instead of coupons, as described in this section, these leaflets being marked with a serial number and the commissions being calculated on orders obtained on these leaflets, or credited to the serial number, the plan being that where one has made an initial purchase and received one's serial number on one's order form such person is given a number of leaflets, with the same serial number thereon, and subsequent sales, following a stated number, are thereafter credited to this serial number, and such person is given a commission on orders obtained which are credited to this serial number, by which the purchaser is supposed to secure a credit in this series to other parties who continue to duplicate the plan, and thus carry it on in an endless chain.

(Code 1977, § 17-3008)