The rapid growth of goods and services sold online can take an online business by surprise as customer demand outpaces inventory supplies. The Better Business Bureau, along with the
Federal Trade Commission (FTC), advise online merchants to review their obligations under the Mail or Telephone Order Merchandise Rule to better serve their customers during the holiday season.
The Mail Order Merchandise Rule spells out the ground rules for making promises about shipments, notifying consumers about unexpected delays and refunding consumers' money. 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.
By law, businesses must have a reasonable basis for stating that a product can be shipped within a certain time. If you cannot 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 does not give his okay, you must promptly refund all the money the customer paid without being asked by the customer.
Your failure to ship on time or your failure to notify your customers promptly about delays and to obtain their consent to delay shipment, can adversely affect your business by discouraging repeat purchases.
For additional information about advertising, marketing and other online business practices, visit the FTC's web site at www.ftc.gov, or the BBBOnLine site at www.bbbonline.org.
