Advertising Law Blog

As part of its ongoing review of FTC rules and guides, the FTC is seeking public comment on proposed amendments to its Mail or Telephone Order Merchandise Rule.

The Rule was initially issued in 1975 and commonly known as the 30-day rule. The Rule governs, among other things, a direct marketing merchant's obligations under federal law with respect to the shipment of merchandise. In short, under the Rule, a merchant must have a good faith belief that it will meet a stated shipping time and if no shipment time is stated, then fulfillment must be made within 30 days. The Rule also requires merchants to send notices if a represented shipment date will not be made and, depending on the circumstances, either offer or make refunds. There are other restrictions with respect to unordered merchandise and refunds. An FTC publication, A Business Guide to the FTC's Mail or Telephone Order Merchandise Rule, offers information about the Rule and how to comply.

Four years ago, the FTC sought public comment on how the rule could be updated to address changes in technology. Now the FTC has sought to amend the Rule. According to the Federal Register notice, the amendments seek to:

• Clarify that the Rule covers all orders placed over the Internet (which was essentially done in 1993);
• Revise the Rule to permit new refund delivery options 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;
• 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.

Marketers who seek to have input on the rule should provide comments on the proposed amendments. Comments must be received by the FTC by December 14, 2011.