The FTC Mail Order Rule

Every year Americans buy goods and services through the mails worth more than $200 billion.

With so much cash at stake it's no wonder that consumers want their money's worth each and every time they place an order. Not surprisingly, the goal is the same for those in the mail-order business.

"Every time you send out a catalog you're asking consumers to trust you," says Jack Rosenfeld, president of Hanover Direct Inc.,"Just like the corner shop or the store in a nearby mall, if you fail to meet customer expectations, you'll soon be out of business."

"You have to earn your position in the marketplace and that means filling each order with care," says Chris Rebello, Director of Postal Affairs for Colorado- based Current, Inc. "The time to prove your worth is when a customer places an order."

While most of the companies that receive mail-order dollars are careful to honor consumer interests, some are not. When orders are unreasonably delayed or not available, that's when federal regulations become important.

Since 1975, the Federal Trade Commission (FTC) has used regulations known formally as the "Mail-Order Rule" to protect consumer interests. So what's in the rule for consumers? Here's a rundown of the 10 most important points.

• Delivery. Mail-order firms must state when an order will be delivered. A statement such as "allow 5 weeks for shipment" is sufficient, but there's a catch: If no delivery date is stated, then goods must be shipped within 30 days after a "properly completed" order is received.

• Timing. The clock starts running as soon as a firm receives all the information needed to fill an order.

• Supplies. Companies are not allowed to advertise products unless there is a "reasonable basis" to believe that an order can be filled by the promised delivery date.

• Whoops. If something goes wrong and the mailer cannot make the delivery date, then the consumer must have the option either to approve a delayed shipment or cancel the order. If the order is canceled, the consumer must receive a prompt and full refund.

• Notification. An option notice must be sent before the promised shipping date or within 30 days after an order has been received, whichever is longer. Notices must be sent by first class mail and consumers must be able to respond without cost using prepaid business mail, prepaid postage cards or a toll-free "800" number.

• No Response. If consumers do not respond to the option notice, the mailer can assume that it's okay to delay the order.

• Whoops again. If goods are not ready by a second delivery date, the mailer must notify consumers that they can cancel the order (and get a full refund) or permit a second delay. If the consumer does not respond to a second delay notice, the order is automatically canceled and a complete refund must be provided.

• Refunds. No fooling around with this one. Mailers must refund orders paid for by cash, check or money order within seven days after an order is canceled. If a credit card was used to make the purchase, then the refund must be made within one billing cycle.

• No Funny Business. Mailers cannot use credit vouchers or script to make refunds.

• Exceptions. FTC regulations do not apply to several common transaction categories.

  * Magazine subscriptions (except for the first shipment).
  * Sales that involve seeds or growing plants.
  * C.O.D. orders
  * Mail-order photo-finishing.
  * Credit orders where there is no charge until the merchandise is mailed.
  * Book and record clubs that use "negative option" sales where goods are shipped first so they can be examined by the consumer and then accepted or rejected.

Peter G. Miller is an image, marketing, and public relations consultant whose clients include selected national corporations, associations, and web sites. Mr. Miller can be reached at peter@boardroomarts.com