October 1, 2014

Shipping Goods On Time: Does Your Company Have Everything In Order?

Seller Beware: Consumer Protection Insights for Industry

If your company takes orders over the Internet, by phone, or by mail, the Federal Trade Commission's (FTC's) Mail, Internet, or Telephone Order Merchandise Rule (f/k/a the Mail or Telephone Order Merchandise Rule), imposes certain obligations if the merchandise cannot be shipped in time. In short, your company must have a reasonable basis for any promises made to consumers that goods will be shipped within a certain time, or within 30 days if no representation is made. If shipping will be delayed, your company must ask the consumer if he or she agrees to the delayed shipment and provide a full refund if the consumer does not.

The Rule is back in the spotlight since the FTC announced several amendments in September. The amendments clarify that the Rule applies to all orders made over the Internet, including those made through mobile apps. The amendments also shorten the time in which credit card refunds must be made from one billing cycle to seven business days, and provide sellers increased flexibility by permitting certain refund deliveries by any means at least as fast and reliable as first class mail. The amendments also make changes to the refund requirements for non-traditional payment methods.

The new amendments take effect on December 8, 2014, so companies have plenty of time to prepare. When that deadline passes, companies should expect the FTC to be checking for compliance with the amended Rule.

© Arnold & Porter Kaye Scholer LLP 2014 All Rights Reserved. This blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.

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