Federal Trade Commission ■ Bureau of Consumer Protection ■ Office of Consumer and Business Education

FTC Business Alert

Selling on the Internet:

Prompt Delivery Rules

Washington, D.C. — The Internet is the fastest growing source of mail order sales. It’s estimated

that consumers spent $14-$15 billion on Internet-based goods and services in 1998 — $5 billion

alone during the 1998 holiday shopping season. The explosive growth in the goods and services

sold online took many online sellers by surprise: demand outpaced supply, depleting inventories

and disappointing customers. The Federal Trade Commission is advising online merchants to

review their obligations under the Mail or Telephone Order Merchandise Rule to better serve their

customers this holiday season.

The Rule spells out the ground rules for making promises about shipments, notifying consumers

about unexpected delays, and refunding consumers’ money. Enforced by the FTC, the Mail or

Telephone Order Rule applies to orders placed by phone, fax or the Internet. Your compliance

can have bottom line benefits for your company — that is, satisfied customers are repeat

customers.

Complying With The Rule

By law, you must have a reasonable basis for stating that a product can be shipped within a certain

time. If your advertising doesn’t clearly and prominently state the shipment period, you must have

a reasonable basis for believing that you can ship within 30 days.

If you can’t ship within the promised time (or within 30 days if you made no promise), you must

notify the customer of the delay, provide a revised shipment date and explain his right to cancel

and get a full and prompt refund.

For definite delays of up to 30 days, you may treat the customer’s silence as agreeing to the

delay. But for longer or indefinite delays — and second and subsequent delays — you must get the

customer’s written, electronic or verbal consent to the delay. If the customer doesn’t give you his

okay, you must promptly refund all the money the customer paid you without being asked by the

customer.

Finally, you have the right to cancel orders that you can’t fill in a timely manner, but you must

promptly notify the customer of your decision and make a prompt refund.
Running Late? Overwhelmed with Orders?

The Rule gives you several ways to deal with an unexpected demand.

✔ You can change your shipment promises up to the point the consumer places the order, if you

reasonably believe that you can ship by the new date. The updated information overrides previous

promises and reduces your need to send delay notices. Be sure to tell your customer the new

shipment date before you take the order.

✔ You must provide a delay option notice if you can’t ship within the originally promised time. The

Rule lets you use a variety of ways to provide the notice, including e-mail, fax or phone. It’s a

good idea to keep a record of what your notice states, when you provide it, and the customer’s

response.

For More Information

Contact the FTC’s Consumer Response Center for the complete Business Guide to the Mail or

Telephone Order Merchandise Rule and Advertising and Marketing on the Internet: Rules of the

Road. The FTC works for the consumer to prevent fraudulent, deceptive and unfair business

practices in the marketplace and to provide information to help consumers spot, stop and avoid

them. To file a complaint or to get free information on consumer issues, visit www.ftc.gov or call

toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. The FTC enters Internet,

telemarketing, identity theft and other fraud-related complaints into Consumer Sentinel, a secure,

online database available to hundreds of civil and criminal law enforcement agencies in the U.S.

and abroad.

Your Opportunity to Comment

The National Small Business Ombudsman and 10 Regional Fairness Boards collect comments

from small businesses about federal compliance and enforcement activities. Each year, the

Ombudsman evaluates the conduct of these activities and rates each agency’s responsiveness to

small businesses. Small businesses can comment to the Ombudsman without fear of reprisal. To

comment, call toll-free 1-888-REGFAIR (1-888-734-3247) or go to www.sba.gov/ombudsman.

FEDERAL TRADE COMMISSION FOR THE CONSUMER

WWW.FTC.GOV TOLL-FREE 1-877-FTC-HELP

November 1999