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FTC WARNS ONLINE RETAILERS TO KEEP HOLIDAY SHIPPING PROMISES

Posted on November 26, 2000

      The U.S. Federal Trade Commission (FTC) is warning more than 100 online retailers that they'd better not make holiday shipping promises they can't keep.

      In order to avoid the spate of consumer complaints about late deliveries it received last holiday season, the FTC is sending letters to the e-tailers telling them they should not make "quick-ship claims" they can't keep to entice consumers to their sites.

      As a result of consumer complaints about late deliveries last year, the FTC sued seven companies for violating its Mail or Telephone Order Merchandise Rule. The rule, which applies to merchandise ordered over the Internet as well as by telephone, fax, or mail, spells out the requirements for making promises about shipment delivery times, notifying customers and making refunds.

      The seven companies, CDnow, KBkids.com, Macys.com, The Original Honey Baked Ham Company of Georgia, Patriot Computer, and Toysrus.com, as well as the now-defunct Minidiscnow.com, agreed to pay a total of $1.5 million in fines.

      FTC spokesman Eric London said the agency conducted a "surf" of more than 200 Web sites for the shipping promises made to consumers this holiday season. The FTC found that more than 100 of them made "quick-ship" claims, assuring consumers that in-stock items usually ship within 24-48 hours after an order is placed.

      Under the rule, merchants must base shipment claims on facts, not on hopes. If a retailer makes a good-faith claim that he is unable to fulfill, he must notify the consumer of the delay within the original shipment time. In addition, retailers must give their customers a revised shipping date as well as give them the right to cancel a transaction and get a "full and prompt refund" if they are not satisfied with the new shipping date.

      London said the FTC will be monitoring selected Web sites to see if they are complying with the rule.

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