FTC Issues Final Amendments to Mail or Telephone Order Merchandise Rule

The Federal Trade Commission has issued final amendments to the Mail or Telephone Order Merchandise Rule as part of its systematic review of all of the agency’s rules and guides.

The Rule, issued in 1975, requires mail and phone-based sellers to have a reasonable basis to expect that they can ship within any advertised time frame, or within 30 days. It also requires that, when the promised shipping time cannot be met, the seller must obtain the buyer’s consent to a shipping delay or refund payment for the unshipped merchandise.

In 2007, the FTC sought public comment on how the Rule could be amended to address changes in technology and commercial practices. Based on a review of comments received, in October 2011 the FTC proposed amendments to the Rule that would:

• Clarify that the Rule covers orders placed over the Internet, and change the name of the Rule to the Mail, Internet, or Telephone Order Merchandise Rule;

• Revise the Rule to allow sellers to provide refunds and refund notices to buyers by any means that is 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.

In April 2013, the FTC issued a staff report recommending that the Commission approve the proposed amendments and sought public comment on the report. The Commission received no comments. In the action announced today, the Commission has adopted the proposed amendments.

For information, read A Business Guide to the FTC's Mail or Telephone Order Merchandise Rule.

The Commission vote approving the Notice amending the Mail or Telephone Order Merchandise Rule was 5-0. The changes will become effective December 8, 2014. (FTC File No. P924214; the staff contact is Jock K. Chung, Bureau of Consumer Protection, 202-326-2984)

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