FTC Lobbied To Revise Internet, Mail Order Rules

Written by Evan Schuman
November 9th, 2007

Retail lobbyists are pushing the U.S. Federal Trade Commission to update 14-year-old rules governing mail-order and telephone sales to specifically include sales made over the Internet.

"Whether orders come in the mail, by telephone or over the Internet is secondary to the point that customers should receive the products they ordered, at the price they agreed to pay, and within the time that was promised," NRF Senior Vice President and General Counsel Mallory Duncan said. "The Internet has gone from dial-up modems to DSL to cable to fiber optic in a just a decade, not to mention from desktops to laptops to handheld devices. With today’s rapidly changing technologies, it is important that FTC regulations focus on customer service rather than technical distinctions that could quickly become obsolete."

The National Retail Federation and filed their comments Wednesday on the FTC’s proposal to update its Mail or Telephone Order Merchandise Rule, a set of regulations that govern mail-order sales in areas such as accurate descriptions of products, prompt shipping, notification of delays, and refunds. The rules were first adopted in 1975 in response to consumer complaints that merchants had failed to ship merchandise on time, failed to ship at all or failed to provide prompt refunds for unshipped items.

NRF officials said the rule change would likely have little to no practical impact on retailers, but that the goal was to clean up the language.

The FTC is also considering a change that would update the regulations’ current list of payment methods – cash, check, money order and credit cards – to include new forms of payment such as debit cards, gift cards and services such as Pay Pal, NRF officials said.

NRF and supported the proposal but said refunds for debit cards should be handled the same as those for credit cards because retailers frequently cannot distinguish between the two types of cards. Another change would repeal a requirement that refunds be made by first-class mail and instead allow them to be made by a means "at least as fast and reliable as first-class mail," such as private couriers or electronic transfers.

Other proposals from the retail lobbyists:

  • A request that a distinction be made that orders handled through a retailer’s internal computer systems – such as a sales associate using an in-store computer to find an item or place an order – not be considered Internet orders even if those systems happen to operate over the Internet.
  • They argued that retailers be allowed to substitute merchandise of equal or greater value when an out-of-stock situation would prevent an item from being shipped on time, provided that the customer agrees. They also proposed that merchants not be required to promise a definite delivery date on some custom-made or handcrafted products provided that customers are given the option to cancel the order.Milwaukee

  • advertisement

    Comments are closed.


    StorefrontBacktalk delivers the latest retail technology news & analysis. Join more than 60,000 retail IT leaders who subscribe to our free weekly email. Sign up today!

    Most Recent Comments

    Why Did Gonzales Hackers Like European Cards So Much Better?

    I am still unclear about the core point here-- why higher value of European cards. Supply and demand, yes, makes sense. But the fact that the cards were chip and pin (EMV) should make them less valuable because that demonstrably reduces the ability to use them fraudulently. Did the author mean that the chip and pin cards could be used in a country where EMV is not implemented--the US--and this mis-match make it easier to us them since the issuing banks may not have as robust anti-fraud controls as non-EMV banks because they assumed EMV would do the fraud prevention for them Read more...
    Two possible reasons that I can think of and have seen in the past - 1) Cards issued by European banks when used online cross border don't usually support AVS checks. So, when a European card is used with a billing address that's in the US, an ecom merchant wouldn't necessarily know that the shipping zip code doesn't match the billing code. 2) Also, in offline chip countries the card determines whether or not a transaction is approved, not the issuer. In my experience, European issuers haven't developed the same checks on authorization requests as US issuers. So, these cards might be more valuable because they are more likely to get approved. Read more...
    A smart card slot in terminals doesn't mean there is a reader or that the reader is activated. Then, activated reader or not, the U.S. processors don't have apps certified or ready to load into those terminals to accept and process smart card transactions just yet. Don't get your card(t) before the terminal (horse). Read more...
    The marketplace does speak. More fraud capacity translates to higher value for the stolen data. Because nearly 100% of all US transactions are authorized online in real time, we have less fraud regardless of whether the card is Magstripe only or chip and PIn. Hence, $10 prices for US cards vs $25 for the European counterparts. Read more...
    @David True. The European cards have both an EMV chip AND a mag stripe. Europeans may generally use the chip for their transactions, but the insecure stripe remains vulnerable to skimming, whether it be from a false front on an ATM or a dishonest waiter with a handheld skimmer. If their stripe is skimmed, the track data can still be cloned and used fraudulently in the United States. If European banks only detect fraud from 9-5 GMT, that might explain why American criminals prefer them over American bank issued cards, who have fraud detection in place 24x7. Read more...

    Our apologies. Due to legal and security copyright issues, we can't facilitate the printing of Premium Content. If you absolutely need a hard copy, please contact customer service.