Delivery Rules

For Internet Businesses

The Internet has become the fastest growing source of mail order sales. The Federal Trade Commission (FTC) estimated that in 1998 consumers spent nearly $15 billion on Internet-based goods and services – $5 billion during the 1998 holiday season alone. The Better Business Bureau and the FTC advise online merchants to review their obligations under the Mail or Telephone Order Merchandise Rule to better serve their customers during the holiday.

The Mail or Telephone Order Rule and Advertising and Marketing on the Internet: Rules of the Road provide guidance for Internet businesses. The Rule spells out the ground rules for making promises about shipments, notifying consumers about unexpected delays, and refunding consumers’ money.

By law, businesses must have a reasonable basis for stating that a product can be shipped within a certain time. If a 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 the customer’s right to cancel and get a full and prompt refund.

Your fulfillment obligations begin as soon as you receive a “properly completed” order. An order is properly completed when you receive the correct full or partial (in whatever form you accept) payment, accompanied by all the information you need to fill the order.

For definite delays of up to 30 days, businesses may treat the customer’s silence as agreeing to the delay. But for longer or indefinite delays, and second subsequent delays, you must get the customer’s written, electronic or verbal consent to delay. If the customer doesn’t give his okay, you must promptly refund all the money the customer paid without being asked by the customer.

Merchants who violate the Rule can be sued by the FTC for injunctive relief, monetary civil penalties of up to $10,000 per violation, and consumer redress.

Your failure to ship on time or your failure to notify your customers promptly about delays and to obtain their consent to delayed shipment can adversely affect your business by discouraging repeat purchases.

For the complete Business Guide to the Mail or Telephone Order Merchandise Rule and Adverting and Marketing on the Internet: Rules of the Road contact the FTC’s Consumer Response Center at 877/FTC-HELP or visit the FTC’s Web site at http://www.ftc.gov.

Each king in a deck of playing cards represents a great king from history: the spades are King David, the clubs are Alexander the Great, the hearts are Charlemange, and the diamonds are Julius Caesar.