Honoring your Shipping Claims – What the “30-Day Rule” Means to your Online Business
by Caron_Beesley, Community Moderator
- Created: August 29, 2012, 6:49 am
Do you sell products online or over the phone? Did you know the law requires you to honor any claims you make about your shipping policies and proactively notify customers about delays?
Enforced by the Federal Trade Commission (FTC), the Mail or Telephone Order Merchandise Rule (also known as the “30-Day Rule” by direct marketers) was prompted by the massive increase in online shopping over the past decade and spells out the ground rules for making promises about shipments, notifying consumers about unexpected delays, and refunding consumers' money.
If you are an online merchant or thinking of becoming one, here’s what you need to know:
What Does the 30-Day Delivery Rule Require?
Complying with the “Mail or Telephone Order Merchandise Rule” will ensure you don’t have the FTC on your case, but it also makes good business sense. Being open and proactive about your delivery policies and problems that arise from depleted inventory and other issues will make for happier customers – which means a greater chance of repeat business.
Here’s what the rule requires of online merchants, as well as any merchants who take orders via the phone or fax:
- If you commit to a specific shipping timeframe after an order is placed on your website or through marketing materials, then you must have a reasonable basis for making this claim. A “reasonable basis” means that you can show evidence you have anticipated demand and have the inventory, and that you have a fulfillment processes and order records necessary to ensure items are shipped in accordance with your claims (read more about this from the FTC).
- If you make no shipment statement, you must have a reasonable basis for believing that you can ship within 30 days of receipt of an order. That’s why direct marketers sometimes call this the "30-day Rule."
- If you can't ship within the promised time (or within 30 days if you made no promise), say for example, if demand was unexpectedly high or your suppliers have let your down, you must notify the customer of the delay, provide a revised shipment date and explain their right to cancel and get a full and prompt refund.
- If within the 30-day window you have notified the customer of a “definite delay” (i.e. you can state when the item is expected to ship) but have not heard back from that customer with a refund or cancellation request, then you can treat the customer’s silence as consenting to the delay.
- For “indefinite delays” and any subsequent delays after the 30-day period you must get the customer’s written, electronic or verbal consent to the delay. If that isn’t given then you must issue a refund, even if the customer didn’t ask for one.
- You also have the right to cancel an order you can’t fulfill in a timely manner. However, you must notify the customer of this decision and make a prompt refund.
Dealing with Unexpected Demand?
If demand for a product is greater than anticipated and it’s impacting your shipping claims, the Rule does offer some leeway:
- If you are proactive and see that demand is creating a problem, you can change your shipment promises up to the point that a consumer places an order – if you are confident you can honor that new shipping date/claim. This will override any previous promises and reduce your need to send delay notices – although you must alert customers of the new shipment date(s) before you take their orders.
- As stated above, if you can’t ship within the originally promised timeframe you must let your customers know with a delay option notice – this can be sent via email, phone or fax.
The FTC website provides more information about the “30-Day Rule” including FAQs, advice about good record keeping, and where to go for help if you have additional questions.
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