It’s shopping season, and many of us will probably do at least a portion of our holiday shopping online, via telephone or by mail this year. With the short period of time between Thanksgiving and Christmas, and the great demand for certain products (think “Tickle Me Elmo” or anything Frozen themed) there’s always a concern that your packages won’t arrive in time. Although there’s no accounting for bad weather or packages getting lost in the mail, the Federal Trade Commission’s “Mail or Telephone Order Merchandise Trade Regulation Rule” (16 CFR Part 435) provides very detailed rules for shipping products purchased by mail, telephone, internet or fax. These rules ensure merchants ship goods in a timely manner, and that buyers are notified of shipping delays.
If the seller promises shipment in a specific period of time (e.g., your items will ship within 14 business days), this statement must have a reasonable basis. This means the seller must reasonably believe he will be able to ship the goods in that time period. The seller should consider supply, anticipated demand, its fulfillment system, and record keeping when determining the shipping period. If the seller doesn’t clearly state a shipment period, the Rule sets the reasonable shipping period at 30 days (50 days if the order is accompanied by an application for credit). The clock starts on this shipping period as soon as the seller receives a properly completed order, including payment and all the information needed to fill the order.
If the goods cannot be shipped within the promised time (or within 30 days if no shipping period was stated), the seller must notify the buyer of the delay as quickly as possible, but in no event after the originally promised shipping period. This notice must provide a revised shipment date, a statement of the buyer’s right to cancel the order, and a free method for cancelling the order (e.g., toll-free phone number or postage-paid postcard). If the seller cannot provide a revised shipment date, the notice must also provide an explanation of why the goods cannot be shipped, so that the buyer may judge the possible length of the delay.
If the shipping date is less than 30 days delayed, the buyer’s non-response to this notice may be taken as consent to the delay. If the shipping date is more than 30 days delayed, or if the seller cannot provide an estimated shipping period, the buyer must specifically consent to the delay, verbally or in writing. If the buyer does not respond to the delay notice, the seller must cancel the order. The same is true if there is a second delay in shipping (the seller cannot ship within the revised shipping period).
Instead of asking the buyer to consent to the shipping delay, the seller may cancel the order and refund the buyer. The seller must notify the buyer that the order has been cancelled, and send the refund within the same period required for the delay notice.
If the order is canceled by the buyer, the seller must provide a full refund for the merchandise and any pre-paid shipping costs for the unshipped items. Payments made by cash, check or money order must be refunded by mail within seven working days after the order is cancelled. Credit card charges must be credited back to the buyer’s account within one billing cycle after the order is cancelled. If the purchase was made using promotional devices such as coupons or proofs of purchase, the seller must provide “reasonable compensation” to the buyer.
For more information, see the FTC’s informational “Business Guide to the Mail or Telephone Order Merchandise Trade Regulation Rule” booklet.
For more information on this and other “Everyday Law” topics, visit the Sacramento County Public Law Library, “Providing Free Public Access to Legal Information for over 100 years.”
By Mary Pinard Johnson, Public Services Librarian
Sacramento County Public Law Library