The FTC 30-Day Shipping Rule for Online Shops
When a supplier runs late or a handmade batch takes longer than expected, an online shop has to decide what to tell customers who already paid. Federal law has a specific answer. The Federal Trade Commission's Mail, Internet, or Telephone Order Merchandise Rule sets deadlines for shipping, requires notice when you cannot meet them, and sets a timeline for refunds.
1. Who the rule covers
The FTC's business guide says the rule applies to most goods a customer orders from a seller by mail, telephone, fax, or on the Internet. The guide lists exemptions, including magazine subscriptions after the first shipment, seeds and growing plants, C.O.D. orders, transactions covered by the FTC's Negative Option Rule, and services.
2. The basic shipping promise
Under 16 CFR Part 435, when you solicit an order, you must have a reasonable basis to expect that you can ship:
- within the time you clearly and conspicuously state, or
- within 30 days after receiving a properly completed order, if you do not state a time.
That default is why the FTC guide notes that direct marketers sometimes call this the "30-Day Rule." If the customer applies to you for credit to pay for the order, the default is 50 days instead of 30.
"Reasonable basis" means you have information that would satisfy a reasonable and prudent businessperson, acting in good faith, that your shipping statement is true. If your listing says "ships in 3 to 5 business days," that is the promise you are measured against, not 30 days.
3. When you cannot ship on time
If you learn you cannot ship by the promised date, the rule requires you to offer the customer, clearly and without them asking, the option to either consent to the delay or cancel and receive a prompt refund. You must make this offer within a reasonable time after you learn of the delay, and no later than the original shipping deadline. The notice must give a definite revised shipping date, or explain why you cannot give one.
What happens if the customer does not reply depends on the length of the delay:
| Revised shipping date | If the customer does not respond |
|---|---|
| 30 days or less after the original deadline | Silence counts as consent to the delay, and the notice must say so |
| More than 30 days after, or no definite date | The order is treated as cancelled unless you ship within 30 days of the original deadline with no cancellation received, or the customer expressly consents |
If the customer has consented to an indefinite delay, they keep a continuing right to cancel any time before you ship.
4. What a prompt refund means
The rule defines it. For payments by cash, check, or money order, a refund must be sent within 7 working days of when the buyer's right to a refund begins. For credit card sales, the refund must be made within 1 billing cycle. If you cannot meet a promise and cannot get consent, the FTC guide says you must refund the money for the unshipped merchandise without being asked.
5. Keep records
The FTC guide explains that records are not required, but that in an enforcement action, if you cannot document your systems and procedures for complying, you bear the burden of proving you comply. Useful records include how you estimate shipping times, how you track inventory against orders, when each order was received and shipped, and copies of any delay notices.
6. Putting it into practice
- State realistic ship times on listings, especially for made-to-order items, and update them when production slows.
- Set a check date a few days before each promised ship date so you can send a delay notice in time.
- Use a template delay notice that includes the revised date, the customer's right to cancel for a full refund, and what happens if they do not reply.
- Process refunds fast, within one billing cycle for card payments.
7. Key takeaways
- The FTC rule covers most goods ordered by mail, phone, fax, or online.
- Ship within the time you state, or within 30 days if you state none (50 days if the buyer applies to you for credit).
- If you will be late, offer the customer the choice to accept the delay or cancel for a prompt refund, before the original deadline.
- A delay of 30 days or less can be accepted by silence; longer or indefinite delays need express consent or the order is cancelled.
- Card refunds are due within one billing cycle; cash, check, or money order refunds within 7 working days.