Yule Be Sorry

Be Forewarned

The FTC cracks down on delayed delieveries.

Making customers happy isn't the only reason you should ensure your site delivers products and customer service in a timely fashion-doing so could also prevent nasty legal disputes. Consumers might file class-action suits that allege false advertising, and state and federal government agencies have the power to levy sanctions.

The Federal Trade Commission says companies that don't deliver on their promises can be subject to fines. The agency enforces The Mail or Telephone Order Merchandise Rule, a 1975 measure that says mail-order merchants must ship purchases within the time specified in their advertising. If no shipment time is given, any customer has 30 days to receive a "properly completed order."

The rule also requires that companies notify consumers if orders cannot be shipped on time and also give new shipping dates. The customers must then be given an opportunity to cancel their orders for full refunds-unless they don't respond within 30 days of the first notice announcing delays. And if merchants cannot meet the new shipping dates, they must notify customers a second time. Unless customers expressly consent to the second delay, merchants by law must cancel their orders and refund their money. The rule affects traditional direct mailers and companies that receive sales orders through computers, faxes or other means used to transmit orders over phone lines.

Don't think you can disregard the rules: Earlier this year, the FTC said those e-tailers that failed to deliver on time during the holiday season could face sanctions from the agency and class-action lawsuits. On July 26, 2000, the FTC delivered on that promise, winning $1.5 million in civil penalties against seven online retailers. "We've received complaints here about problems with delivery, and we've been looking into the problem ourselves," says Elaine Kolish, associate director of enforcement at the FTC. For more information about this rule, log on to the FTC at www.ftc.gov.


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Melissa Campanelli is a technology writer in Brooklyn, New York, who has covered technology for Mobile Computing & Communications and Sales & Marketing Management magazines. You can reach her at mcampanelli@earthlink.net.

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This article was originally published in the October 2000 print edition of Entrepreneur with the headline: Yule Be Sorry.

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