Last week, the Federal Trade Commission issued a warning to consumers to look out for "Ships from the USA" claims. In the warning, the FTC explained that a "ships from the USA" claim doesn't necessarily mean that the product was also made in the United States.
As the FTC explained, "Let’s say there’s a product that was made overseas. Sometimes, stores will ship that product to U.S. distribution centers. No problem. Sometimes, stores will let customers know that the product is shipping from within the U.S. Again, no problem — as long as it’s clear those products aren’t U.S.-made. If a store doesn’t make that difference clear, chances are the products aren’t “made in the USA.”
What does this mean for advertisers?
According to the FTC's Enforcement Policy Statement on U.S. Origin Claims, in order to make an unqualified claim that a product was made in the United States, the advertiser must be able to substantiate that the product was "all or virtually all" made here. That means that "all significant parts and processing that go into the product are of U.S. origin" and that the product only contains a "negligible" amount of foreign content. In order to make an unqualified U.S.-origin claim, the FTC also expects that the final assembly or processing of the product to take place in the United States. The FTC also considers other factors in order to determine whether the product was made here, including the portion of the product's total manufacturing costs that are attributable to U.S. parts and processing and how far removed from the finished product any foreign content is.
In the warning issued to consumers, the FTC is expressing the view that a "ships from the USA" claim is also communicating that the product was actually made in the United States. Therefore, if you're making these types of shipping claims, you'd better make sure you're also in compliance with the FTC's "all or virtually all" standard.
To be clear, the FTC permits qualified U.S.-origin claims as well. For example, it's perfectly acceptable to make a truthful claim that a product is "Made in the USA from U.S. and imported parts." So, if you're making a claim that a product (which isn't made here) is being shipped from the United States, you should qualify the claim so that consumers are not confused (e.g., "Made in China, but ships directly to you from our warehouse in New Jersey").
While we're talking about shipping, if you are making shipping claims, don't forget about the need to comply with the FTC's Mail, Internet, or Telephone Order Merchandise Rule as well.
"When the seller says the product 'ships from the USA,' what does that really mean?"