Online Marketers Need to Know about FTC Proposed Changes to Mail Order Rule

If you follow advertising law, you know that the FTC is in the process of reviewing all of its agency rules and guides to conform them to modern marketplace realities. Earlier this month, the FTC announced proposed changes to the Mail or Telephone Order Merchandise Rule, and it opened the changes for public comment.

The FTC promulgated the Mail Order Rule, as it is commonly called,  in 1975. The rule requires marketers to deliver merchandise within the stated time frame, or if no time frame is given, within thirty (30) days.  The rule also requires consent if the seller cannot meet the expected time frame. In 2007, the FTC sought public comment to bring the rule into modern times.

Now, approximately four years later, the FTC announced proposed changes that would clarify that the rule applies to orders placed on the Internet and not just the phone or mail. The FTC also wants to allow sellers to issue refunds and refund notices by any means, so long as it is as fast and reliable as first class mail. (Given the difficulties the USPS faces in on time and accurate delivery, one has to wonder what the FTC is thinking in using this as a standard.) Refunds should issue within seven (7) working days for payments made with third party credit and within one billing cycle for payments made with the seller’s own credit cards. In addition, the FTC steps into the thorny area of gift cards and debit cards and seeks to clarify seller’s obligations with regard to redeeming these cards.

What is missing from this piece of consumer advocacy is any methodology to address help desks that do not respond and email notifications that make it to spam boxes instead of inboxes. At the same time, this is a good faith, albeit incredibly delayed, effort by the FTC to come up to speed on modern commerce.

Online marketers should start consulting now with their shipping and IT departments to make sure they are meeting the proposed new requirements, particularly with regard to refunds issuing within seven days for credit card purchases.