Shipping and Delays: The Legal Rules

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If your products are late getting to customers, not only will it cause you a loss of goodwill, it may also violate federal law.

FTC rules. The Federal Trade Commission’s Mail or Telephone Order Merchandise Rule, also known as the “30-Day Rule,” imposes basic shipping and refund rules on businesses.

When you advertise merchandise on eBay and don’t say anything about when you plan to ship, you’re expected to ship within 30 days from when you receive the payment and all the information needed to fill the order. If your listing does state when you will ship the merchandise — for example, within two days of payment — you must have a reasonable basis for believing you can meet this shipping deadline.

If  there's a delay — that is, it will take longer than 30 days for you to ship — you have two choices.

  • You can ask for the customer’s consent. If you can’t get consent to the delay, you must, without being asked, refund the money the customer paid you for the unshipped merchandise.

  • You can simply cancel the order, notify the customer, and refund the payment.

Keep a record of how you notified the customer about the delay, whether by email, phone, fax, or regular mail; when you gave the notice; and how the customer responded.

Drop-shipping. In cases of drop-shipped orders, you (the person taking the order), not the shipper, is responsible for complying with the rule.

Because you’re responsible for a drop-shipper's screw-ups, find out the distributor/drop-shipper's return policy and post it at your point of sale or in your catalogue, or, if that’s not possible, include it with the order. If the customer complains about the merchandise — for example, it arrives damaged or has a factory defect — the distributor have to correct the error. But because the customer made the purchase with you, not the distributor/drop-shipper, you’ll have to stay on top of the transaction—for example, get the RMA (return merchandise authorization) number from the distributor, and email it to the customer. The RMA allows you and the distributor/drop-shipper to accurately track and process the returned merchandise.

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