MAIL ORDER LAWS AND REGULATIONS

Introduction

The intent of this report is to give the newcomer to the mail
order business an overview of those laws and regulations that
most affect the small mail order operator.  The intent is not to
give legal advice.  Such advice should always be sought form an
attorney.  Only those laws and regulations that apply to the
small order operator most directly are covered.  Advice is given
from the perspective of an operator of a mail order business
rather than from a legal perspective.

For those interested in an in-depth review of the laws which
affect  the mail order industry, it is recommended that you read
the following book:  The Direct Marketer's Legal Advisor, by
Robert J. Bosch, McGraw Hill Book Company.

The 30 Day Rule

To protect the consumer the FTC has enacted the Mail Order
Merchandise Rule which is generally referred to as the 30 Day
Rule.  Many states have enacted similar laws.  Some of those
laws have a more narrow definition than the federal;  the most
notable is New York State.

The 30 Day Rule requires the seller to deliver the order within
a 30 day period, unless otherwise stated in the sales
literature.  If the seller, for example, states in the order
form that delivery takes 4 to 6 weeks, he has effectively
insulated himself from the law.  In a practical matter, however,
he may have also affected his business in a negative way.

The 30 day period begins when an order arrives and has been
properly paid for.

The 30 Day Rule is an easy regulation with which to comply. It
should rarely take longer than 30 days to fill an order.  If it
does, the seller must notify the buyer of the delay and the
reason for it.

Some mail order companies delay shipment of orders until checks
rendered for payment have cleared.  This should generally not
take longer than 10 days.  If the seller wishes to follow such a
policy, he should so state in his literature.  From the
perspective of a mail order operator, I do not consider this to
be a sound policy.  NSF and ACCOUNT CLOSED checks are relatively
rare and can be minimized with proper controls.  If you practice
such a policy, you may save a few dollars but in return you will
make customers unhappy.  I personally do not buy from companies
that state in their literature that they hold checks for
clearance.  Most mail order companies experience very small bad
debt ratios.  It is recommended that you call the bank the check
is drawn on to verify funds on larger amounts;  as for example,
on orders over $50.

Once the buyer has been notified that an order has been delayed,
the seller is automatically granted an additional 30 day delay
unless the customer advises the seller that the delay is not
acceptable.  If he does not reply to the notification, it
constitutes legal acceptance of the delay.  In general, and in
most states, the seller may obtain a second 30 day delay as long
as there is a good enough reason.

The New York law differs form the Federal law in that stipulates
a maximum period of 65 days (including delays) for an order to
be filled.  Newcomers to the mail order field residing in New
York State should obtain a copy of the New York regulations.

The 30 Day Rule does not pertain to credit card sales.  Credit
card charges should be processed when an order is filled.  If a
mail order credit card sale is cancelled, the seller must issue
a credit against the account of the buyer within one billing
cycle following receipt of the cancellation request.

Unordered Merchandise

The Federal law pertaining to unordered merchandise is simple. 
It strictly forbids this practice.  Free samples, if so
identified, are exempted.
DuniaKita

MAIL ORDER LAWS AND REGULATIONS

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