May 8th, 2013
Coming Soon: Updates to Mail or Telephone Order Merchandise Rule
The Federal Trade Commission ("FTC") issued a Report this week (the "Report") proposing to modernize the Mail or Telephone Order Merchandise Rule (the "Rule"). The Rule, originally issued in 1975 and known by many as the"30 Day Rule", requires merchants selling products by mail or phone to have a reasonable basis to expect that they can ship products within the advertised time frame, or, if no time frame is specified, within 30 days. The Rule also requires that, when sellers cannot ship products within the promised time, they obtain the buyer''s consent to a delay in shipping, or refund payment for the unshipped merchandise. The FTC site publishes guidance to help businesses comply with the Rule's requirements.
The FTC sought public comment in 2007 to address how the Rule could be amended to tackle changes in technology and the rise of computer and Internet ordering. Based on a review of public comments, the FTC proposed amendments to the Rule in 2011. The amendments would:
- Clarify that the Rule covers orders placed over the Internet, regardless of the method consumers use to access the Internet;
- Revise the Rule to allow sellers to provide refunds and refund notices to buyers by any means at least as fast and reliable as first-class mail;
- Clarify sellers'' obligations when buyers use payment methods not spelled out in the Rule, such as debit cards or prepaid gift cards; and
- Require that refunds be made within seven working days for purchases that were made using third-party credit, such as Visa or MasterCard cards. For credit sales where the seller is the creditor (such as merchants using their own store charge cards) the refund deadline would remain one billing cycle.
While the FTC staff is now recommending formal adoption of these changes, members of the public still have time to submit comments. To file a comment, please click here. Upon completion of the comment period (comments are due by July 15, 2013), the FTC staff will make final recommendations.
For more information, please contact Terri J. Seligman at (212) 826 5580 or firstname.lastname@example.org, Hannah Taylor at (212) 705 4849 or email@example.com, or any other member of the Frankfurt Kurnit Advertising, Marketing and Public Relations Group.
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