DEFINITION of ‘Mail Or Telephone Order Merchandise Rule’
A regulation that controls businesses that sell products over the telephone, Internet, or by mail. The Mail or Telephone Order Merchandise Rule, also known as the 30-Day Rule, was enacted by the Federal Trade Commission (FTC), and governs claims that a business makes about its shipping practices.
INVESTOPEDIA EXPLAINS ‘Mail Or Telephone Order Merchandise Rule’
Consumers who purchase goods over the phone, by mail, or via the Internet rely on the company they are interacting with to honour its claims when it comes to how the goods will be shipped and how the company’s refund policy works. This is especially important because the transaction is not taking place face-to-face, meaning that the consumer won’t see the goods until they arrive in the mail.
The Mail or Telephone Order Merchandise Rule requires that businesses tell potential consumers that they can ship products within a specific period of time based on what is reasonable. For example, a business should not advertise that it can deliver a product to a consumer’s door within 24 hours if that is not a real possibility. The rule is sometimes called the 30-Day Rule because, in the absence of any advertised delivery schedule, it is reasonable for a consumer to expect that a product should be shipped within 30 days of purchase.
If a business is covered by the Mail or Telephone Order Merchandise Rule it has to determine what a reasonable period of time would be to ship a product. Businesses determine this by making a good faith estimate. Businesses should err on the side of caution when advertising how quickly they can ship a good, as it is against the rule to falsely advertise.
As soon as a product order is received, the business is on the clock and its obligation to ship a product begins. If it seems as if the shipment will be delayed the business should notify the purchaser of the new expected date, along with a reason if a revised shipment date cannot be determined. If an order has to be cancelled, the business must provide a refund within a reasonable amount of time.