on the Internet: Prompt Delivery Rules
The Internet is the fastest growing source of mail order
sales. It's estimated that consumers spent $44.5 billion on Internet-based goods and
services in 2000 - $11.5 billion alone during the
2000 holiday shopping season. The explosive
growth in the goods and services sold online has in the
past, taken many online sellers by surprise: demand
has outpaced supply, depleting inventories and disappointing customers. The Federal Trade
Commission is advising online merchants to review their obligations under the Mail or
Telephone Order Merchandise Rule to better serve their customers this holiday season.
The Rule spells out the ground rules for making promises
about shipments, notifying consumers about unexpected delays, and refunding consumers'
money. Enforced by the FTC, the Mail or Telephone Order Rule applies to orders placed by
phone, fax or the Internet. Your compliance can have bottom line benefits for your company
- that is, satisfied customers are repeat customers.
Complying With The Rule
By law, you must have a reasonable basis for stating
that a product can be shipped within a certain time. If your advertising doesn't clearly
and prominently state the shipment period, you must have a reasonable basis for believing
that you can ship within 30 days.
If you can't ship within the promised time (or within 30
days if you made no promise), you must notify the customer of the delay, provide a revised
shipment date and explain his right to cancel and get a full and prompt refund.
For definite delays of up to 30 days, you may treat the
customer's silence as agreeing to the delay. But for longer or indefinite delays - and
second and subsequent delays - you must get the customer's written, electronic or verbal
consent to the delay. If the customer doesn't give you his okay, you must promptly refund
all the money the customer paid you without being asked by the customer.
Finally, you have the right to cancel orders that you
can't fill in a timely manner, but you must promptly notify the customer of your decision
and make a prompt refund.
Running Late? Overwhelmed with Orders?
The Rule gives you several ways to deal with an unexpected
You can change your shipment promises up to
the point the consumer places the order, if you reasonably believe that you can ship by
the new date. The updated information overrides previous promises and reduces your need to
send delay notices. Be sure to tell your customer the new shipment date before you take
You must provide a delay option notice if
you can't ship within the originally promised time. The Rule lets you use a variety of
ways to provide the notice, including e-mail, fax or phone. It's a good idea to keep a
record of what your notice states, when you provide it, and the customer's response.
For More Information
The FTC works for the consumer to
prevent fraudulent, deceptive and unfair business practices in the
marketplace and to provide information to help consumers spot, stop and
avoid them. To file a
complaint or to get free information
on consumer issues, visit
call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. The
FTC enters Internet, telemarketing, identity theft and other fraud-related
Consumer Sentinel, a
secure, online database available to hundreds of civil and criminal law
enforcement agencies in the U.S. and abroad.
FEDERAL TRADE COMMISSION
FOR THE CONSUMER
Opportunity to Comment
The Small Business and Agriculture Regulatory Enforcement Ombudsman and 10 Regional
Fairness Boards collect comments from small business about federal enforcement actions.
Each year, the Ombudsman evaluates enforcement activities and rates each agency's
responsiveness to small business. To comment on FTC actions, call 1-888-734-3247.