January 19, 2001, 12:00 AM

FTC warns e-retailers that mail-order/telephone-order rules apply

Don Davis

Editor in Chief

Hoping to avoid a repeat of last year's enforcement that ended up costing e-retailers $1.5 million in fines due to late shipping of merchandise, the Federal Trade Commission has issued guidelines for e-retailers to keep in mind this holiday shopping season. A survey of more than 200 e-retail sites by the FTC staff found 100 that assured customers that merchandise could ship within 48 hours. The FTC has sent letters to those sites, stating: "As we enter the holiday shopping season, we want to be sure you are aware of and comply with applicable federal regulations." Among the tips that the FTC staff provided Internet-based retailers: --Base shipment claims on facts, not hopes. The rules require that you have a reasonable basis for stating that a product can be shipped within a certain time. --Shipment representations in ads or web sites can be revised before you accept an order. The rules permit you to notify consumers at any time before they complete their order that shipment may take longer than the originally advertised time provided you have a reasonable basis for that new shipment time. --If you unexpectedly can't ship within the promised time, you must notify the consumer of the delay within the original shipment time. --When you notify your customers you must explain that they have a right to cancel the transaction and get a full and prompt refund and you must provide a revised shipment date. --Your obligation to ship begins when you receive all the information needed to process the order. The shipment clock starts ticking as soon as payment information is received from the customer. It doesn't matter whether or not you actually process the payment at the time of the order.


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