Mail Order Rights and Privileges
by Bill Sohl
electronic copy by T.J. Higgins
This article is reprinted from a 1986 issue of The English Channel, a Newsletter Supplement to The Vintage Triumph
This issue of The English Channel (TEC) is devoted to what your rights and privileges are when you order parts and services by mail. But before you panic at the thought that things are rotten in Triumph land, we would like to set your concerns at ease by stating that: with very rare exception, the business practices, response to customers problems and general day to day operation of the vendors of Triumph parts and services are excellent.
If that is so, then why, you ask, is this TEC covering the subject? Unfortunately, not everything that always goes on is as excellent as it should be. Recently VTR was contacted by two members that had problems with one particular vendor. We are happy to report that both member's problems were reconciled to their satisfaction, albeit after a protracted time period and only after VTR assisted in bringing the problems to a head. Much of the ability to bring these two member's problems to a satisfactory conclusion was the result of good supporting documentation and information with regard to the correspondence and phone calls that transpired prior to VTR being asked to help.
The purpose then of this issue's focus is to equip you with the knowledge of what your rights and privileges are and also what the vendor is expected to do to live up to his obligations towards satisfactorily completing your order. By so doing, you will be in a much stronger position to effectively deal with a problem should one arise.
When are you entitled to a refund?
Most people, VTR members included, generally believe that if they don't like something they bought, they are or should be entitled to return the item and receive a refund. As it turns out, there is no legal rule that makes that so. As long as you got what you ordered, and it wasn't defective, stores or mail order vendors are under no obligation to take the item back and give you a refund. Those stores/ vendors that do are doing so as an internal business practice, usually to maintain a good image with their customers.
On the other hand, if you don't get what you ordered, you are always entitled to get your money back. If, for example, you ordered a new set of black TR-3 seat covers with white piping and the vendor can no longer supply them that way, you do not have to accept a substitute. Nor do you need to accept a credit towards other purchases. You are entitled to and should receive a refund. An important point in this example is to be explicit when you order certain items. If you want black seats with the white piping, then be specific on your order form.
What is the Mail Order Rule
The Mail Order Rule was issued by the Federal Trade Commission (FTC) to correct growing problems with late or undelivered mail order merchandise. Under this Rule, the vendor has a duty to ship merchandise on time. He also must follow procedures that the rule requires if he cannot ship ordered merchandise on time.
When there is a shipping delay, the Rule requires that the vendor notify customers of the delay and provide them with an option either to agree to the delay or to cancel the order and receive a prompt refund. For each additional delay, customers must be notified that they must send in a signed consent to a further delay or a refund will be given.
Although most members of the mail order industry adhere to the Rule's requirements, there are some who do not. The FTC's Bureau of Consumer Protection monitors consumer complaints to ensure that businesses comply with the Rule. The FTC also provides compliance information and assistance to all industry members.
When a vendor offers to sell merchandise by mail, the Rule requires him to have a "reasonable basis" for expecting to ship within the time stated in his solicitation.
For example, if the vendor knows before advertising some products that suppliers are on strike and are likely to remain on strike for several months, he does not have a "reasonable basis" for expecting to ship within a month.
The shipping date, when provided in the ad offer, must be clearly and conspicuously stated.
ADVERTISEMENT
Triumph Sweaters S,M,L -- Beige or Blue
$29.95 plus tax
Allow 5 weeks for shipment.
If the ad does not provide a shipping date, the vendor must ship the merchandise within 30 days of receiving a "properly completed" order. An order is properly completed when you send payment accompanied by all information needed to fill the order: Payment may be made by cash, money order, check, or credit card, according to the vendor's policy. If a credit card is used for a purchase, the order is properly completed when the vendor charges your account.
When a vendor cannot ship on time, he must provide the customer with an "option" notice. The notice must provide an option to cancel the order and receive a prompt refund, or to agree to a delay in shipping. And, as with the original date, the vendor must have a reasonable basis for setting that shipping date.
A vendor must also have a reasonable basis for telling customers that he does not know when he can ship merchandise. In that case, he must provide the specific reasons for the shipping problem. For example, that a fire destroyed the warehouse holding the goods and he is unable to provide a revised shipping date because he does not know how long it will take to replace the merchandise.
When you should receive a first notice
If a shipment is delayed, the Rule requires that the vendor give customers an option:
- to consent to a delay; or
- to cancel the order and receive a prompt refund.
People in the trade often refer to the notice as a "delay" notice. More accurately, it should be called an "option" notice. The Rule is violated if the vendor only provides a notice of delay without also providing an option to cancel the order.
Remember, the vendor must send the notice after first becoming aware that there will be a shipping delay. The notice must be sent:
- before the promised shipping date; or
- within 30 days after receipt of the order (if no date was provided in the solicitation).
What a first notice must say
If the vendor provides a revised shipping date of 30 days or less, he must have a reasonable basis for making the change. The notice must inform you that non-response is considered consent to a delay of 30 days or less.
If the vendor is unable to provide a revised shipping date, the notice must state that he cannot determine when the merchandise will be shipped. It must also state that the order will be automatically canceled unless:
- the merchandise is shipped within 30 days of the original shipping date and the vendor has not received your cancellation before shipment; or
- the vendor receives within 30 days of the original date your consent to the delay.
The notice must provide this information if the definite revised shipping date is more than 30 days after the original date.
When the vendor is unable to provide a revised shipping date, he must inform customers of their continuing right to cancel the order by notifying him prior to actual shipment.
What later notices must say
If he is unable to ship the merchandise on or before the revised shipping date, the vendor must notify customers again. This is called a "renewed option" notice. This notice must inform customers of their right to consent to a further delay, or to cancel the order and receive a prompt refund.
The renewed option notice must inform customers that if they do not agree in writing to this delay, their order will be canceled. Unless the vendor receives the customer's express written consent to the second delay before the first delay period ends, he must cancel the order and provide a full refund.
Keep in mind that he does not have to offer a "renewed option" to customers who consent to an indefinite delay in response to the first option notice. But any customer who agrees to an indefinite delay has the continuing right to cancel the order at any time before the merchandise is shipped.
How the vendor should send notices
The vendor should send any option notice by first class mail, and his notice should provide a written means for customers to respond. A prepaid business mail reply or prepaid postage card meets this requirement.
The notice is most advantageous for him if at some point he has to prove that he complied with the Rule. If the FTC takes action against a company, the firm must be able to show that any other form of notice it used was equal to or better that the written form described in the Rule. For example, an "800" telephone number for customers' use in canceling orders is an adequate substitute, if the vendor can prove that the system met the Rule's requirements. This would include being able to show that the 800 number could readily and consistently be used to cancel an order because he provided adequate and competent staff to take cancellations. He should keep records of all cancellations.
When the vendor may cancel an order
In some cases the vendor can have an option to cancel an order or to send out another notice. He may make this decision when he is unable to ship merchandise on time or within the delay period to which the customer agreed. But if he decides to cancel the order, he must inform the customer of this decision and provide a prompt refund.
Whether he cancels or sends another notice, he must inform the customer about it within a reasonable time after he knows he cannot ship the merchandise.
When the vendor must cancel an order
The vendor must cancel an order and provide a prompt refund:
- when the customer does not agree to a delay and exercises the option to cancel and order before it has been shipped;
- when he notifies the customer of his inability to ship the merchandise and of his decision to cancel the order;
- when he is unable to ship merchandise before the revised shipping date and he has not received the customer's consent to a further delay;
- when the delay is indefinite and he has not shipped the merchandise or received the customer's consent to an indefinite delay;
- when the definite revised shipping date in the first option notice is more than 30 days after the original shipping date, and he has not shipped the merchandise, no received the customer's consent to the delay within 30 days of the original shipping date; or
- when he cannot ship on time and does not notify customers of their options.
All refunds must be sent to the buyer by first class mail. If the buyer paid by cash, check, or money order, the vendor must refund payment within seven (7) days after the order is canceled. For credit card sales, he must make refunds within one billing cycle after the order is canceled. UNDER NO CIRCUMSTANCES IS HE TO SUBSTITUTE CREDIT VOUCHERS OR SCRIPT FOR A REFUND. If for some reason the vendor's company has problems in shipping on time, customers may begin to file complaints with him, and with local, state, or federal law enforcement agencies. Because the Federal Trade Commission has enforcement jurisdiction under the Mail Order Rule, many complaints are forwarded to the FTC from other agencies.
When the FTC takes action against a company and alleges that it violated the Rule, the company must have records or other documentary proof that will show the steps it took to comply. Systems and procedures for complying with the Rule are carefully reviewed. Lack of such proof creates a rebuttable presumption that the company failed to comply. This means that the seller must be able to show that it used reasonable systems and procedures to comply with the Rule. Consequently, it is in his best interest to establish an accurate, up-to-date record-keeping system.
What the Rule does not cover
The following mail order sales are exempt from the Rule:
- orders made on a collect-on-delivery basis (C.O.D.);
- orders made by telephone and charged to a credit card account. (While not a true legal opinion, I believe that if you order something by telephone and specifically instruct the vendor NOT to charge your account for anything unless it is being shipped, you would have a cause of action against the vendor if your account WAS charged for a back-ordered item.)
Where to go for help
For more information contact:
- The Federal Trade Commission, Enforcement Division, B.C.P., Washington, D.C. 20580 (202) 376-3475
- The Direct Marketing Association, 1730 K Street N.W., Washington, D.C. 20006
- your local United States Postal Service
- your local consumer protection office
State and local governments also may have requirements with which vendors must comply. You should consult each agency for information about laws that affect your operations.
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