There are many reasons why companies can have shipping delays. Especially during the pandemic, shipping delays have become more frequent. This article presents information relating to customer recourse for failure to ship products in a timely manner.
The Mail Order Rule
The FTC can bring an action against companies for failing to comply with the Sale of Mail, Internet or Telephone Order Merchandise rule. The rule requires e-commerce businesses to have a reasonable basis to expect that the business can ship the product within the advertised time frame (30 days if no time frame specified). If the business cannot ship within the promised time, the business must obtain the buyer’s consent to a delay in shipping or refund payment for the unshipped product.
In seeking a customers consent to delay, there must be a first delay notice. See First Delay Option Notice Template by clicking here.
Tips for Compliance
- Have a “reasonable basis” for any shipment representations or 30 days in there is not any clear and conspicuous notices.
- If a business changes the shipment date by providing delay notice, there must be a “reasonable basis” for the new shipment date or any representation that the business does not know when the product can be shipped.
- Original shipment date stated in the solicitation should be clear an conspicuous. That means the statement should easily noticeable and easily understandable. Some factors to take into account are:
- (1) disclosure of the date should be made in the same means through which purchase communication is presented (for example, online ads will have the disclosure presented in both the visual and audible portions)
- (2) Visual disclosure should stand out from any text or visual elements to make it more easily noticed, read, and understood.
- (3) Audible disclosures should be made at the volume, speed and cadence for an ordinary consumer to easily hear and understand it.
- (4) If made through the internet, the disclosure must be unavoidable. For example, a popup or a notice before continuing to purchase.
- (5) The disclosure cannot be contradicted, mitigated by, or inconsistent with anything else in the communication.
- First delay option notices must include:
- Definite revised shipment date, or, if unknown, a statement that the business is unable to provide one. If a revised shipping date cannot be provided, (1) the reason for delay and (2) the statement that if the customer agrees to the infinite delay, the customer can cancel the order at anytime until the product is shipped must be provided to the customer.
- A statement that, if the customer chooses not to wait, the customer can cancel the order and obtain a full and prompt refund.
- A means for the customer to choose to cancel at the businesses expense.
- If the business cannot meet the specified date, a refund should be offered instead of a gift card or store credit.
FTC Settlement with Fashion Nova
Fashion Nova will pay almost $10 Million for Consumer Refunds to Settle FTC charges in alleged violation of the Mail, Internet, Or Telephone Order Merchandise Rule. See the settlement by clicking here.