The Federal Trade Commission is seeking public comment on proposed amendments to the Mail or Telephone Order Merchandise Rule, which sets a time frame for marketers to ship items to consumers.
Under the current rule, promulgated in 1975, marketers must have a reasonable basis to expect that they can ship merchandise ordered by phone or mail within the time frame advertised, or within 30 days. If the seller cannot ship the merchandise within the promised time, the seller is required to get the purchaser’s consent to the shipping delay or refund his or her payment.
The agency sought comment in 2007 about updating the Rule. Based on the response, the FTC said it “concluded that the Rule continues to benefit consumers and will be retained.”
However, the agency proposed four changes to the Rule:
- Clarifying that it covers all orders placed over the Internet;
- Allowing sellers to provide refunds and refund notices to purchasers “by any means at least as fast and reliable as first-class mail”;
- Clarifying sellers’ obligations when buyers use a method of payment not currently listed in the Rule, like debit cards or prepaid gift cards; and
- Requiring that refunds be made within seven working days where purchases were made with a third-party credit card.
Comments will be accepted on the proposed changes until Dec. 14, 2011.
To read the proposed changes to the Rule, click here.
Why it matters: The Commission said it received four comments about the Rule, all in support of retaining it. Two trade organizations, the National Retail Federation and the Direct Marketing Association, both suggested there was a continuing need for the Rule, which was reviewed as part of the agency’s systematic review of all rules and guides. The Rule “creates explicit competition among retailers to minimize and validate shipping times for consumers’ benefit,” the NRF told the agency, while the DMA said the Rule has “been effective in enhancing consumer confidence in the growth of distance selling, which is critical to the development of electronic commerce.”