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FTC Requires Online Retailers to Comply with Same Shipping, Refund Rules as Phone and Mail Order-based Vendors

The Federal Trade Commission has updated a longstanding rule governing mail and phone-based retailers to explicitly include e-commerce vendors as well, meaning that online retailers now must abide by a 30-day shipping requirement or refund customers' payments if they can't.

FTC Requires Online Retailers to Comply with Same Shipping, Refund Rules as Phone-, Mail Order-based Vendors

Since 1975, buyers from mail and phone-based sellers have been entitled to expect shipment of their orders within any advertised time frame, or 30 days if no specific promise is made, according to the FTC's "Mail or Telephone Order Merchandise Rule" issued that year.

A retailer that couldn't meet that expectation was required to obtain the buyer's consent to a shipping delay or refund payment for the undelivered merchandise.

That rule now has been updated – not only to explicitly include online retailers, but also to recognize modern forms of payment, Jock Chung, an attorney with the FTC, said.

While the old rule covered cash, check, money order and credit card payments, it "left open the question of how to make refunds for debit cards, gift cards and other payment methods," Chung explained. "So we defined some of the requirements for those different payment methods."

The changes will become effective Dec. 8 as part of the newly renamed "Mail, Internet, or Telephone Order Merchandise Rule."

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Since 1975, buyers from mail and phone-based sellers have been entitled to expect shipment of their orders within any advertised time frame, or 30 days if no specific promise is made, according to the FTC's "Mail or Telephone Order Merchandise Rule" issued that year.

A retailer that couldn't meet that expectation was required to obtain the buyer's consent to a shipping delay or refund payment for the undelivered merchandise.

That rule now has been updated – not only to explicitly include online retailers, but also to recognize modern forms of payment, Jock Chung, an attorney with the FTC, said.

While the old rule covered cash, check, money order and credit card payments, it "left open the question of how to make refunds for debit cards, gift cards and other payment methods," Chung explained. "So we defined some of the requirements for those different payment methods."

The changes will become effective Dec. 8 as part of the newly renamed "Mail, Internet, or Telephone Order Merchandise Rule."

Read Full Article

FTC Requires Online Retailers to Comply with Same Shipping, Refund Rules as Phone-, Mail Order-based Vendors