Educational Consumer Tips

Mail or Telephone Order Merchandise Trade Regulation Rule

Author: Better Business Bureau

The Federal Trade Commission issued a rule that became effective February 2, 1976, in response to consumer complaints about mail order businesses that did not ship goods on time. Goods ordered by mail, phone, fax, or computer must be shipped within the time stated on the company's advertisements or within 30 days of receiving the order if no other date is stated on the advertisement. A shipping date, when provided in the order, must be clearly and conspicuously stated.

If the company is unable to ship merchandise within the allotted time, it must send a written notice advising customers that they have two options:

1. They may consent to a delay; or
2. They may cancel the order and receive a prompt refund. The notice must be sent before the promised shipping date or, if no date was given in the solicitation, within 30 days after receiving the order. Customers must also be made aware that no response is considered consent to a delay of not more than 30 days.

If the company is unable to provide a revised shipping date, the notice must state that the company is unable to determine when the merchandise will be shipped. It must also state that the order, if not canceled by the customer, will be automatically canceled unless:

1. The company ships the merchandise within 30 days of the original shipping date; or
2. The company receives, within 30 days of the original shipping date, the customer's consent to the delay.

If the company is unable to ship by the revised shipping date, they must send another notice. This notice must inform customers that, unless they consent in writing to another delay, the order will be canceled and a refund issued. Customers who consented to an indefinite delay do not have to receive a second notice.

All refunds must be sent to the customer by first class mail within seven days after the order is canceled. If payment was made by credit card, refund must be made within one billing cycle after the order is canceled. Credit vouchers or script cannot be used for a refund.

The Mail Order Rule does not cover:

* Magazine subscriptions, except for the first shipment
* Sales of seeds and growing plants
* Orders made on a COD basis
* Transactions covered by the FTC's Negative Option Rule (such as book and record clubs)
* Mail order photo finishing
* Orders made by telephone and charged to a credit card account