If you sell online in the U.S., the FTC’s Mail, Internet or Telephone Order Merchandise Rule says you must ship within the time you advertise. If you state no time, you need a reasonable basis to expect shipment within 30 days after you receive a properly completed order. When you cannot meet the date, you must tell the customer and offer a refund.
What does the rule require on shipping time?
Advertised shipping times have to be reasonable. According to the FTC’s business guide, if you do not clearly state a time, you need a reasonable basis to expect shipment within 30 days of receiving a properly completed order. If you offer in-house credit and say nothing about shipping, you get 50 days instead.
A “properly completed order” means full payment in the proper amount plus all the information you need to ship. If a check bounces or credit is denied, the clock stops and restarts once you receive cash, honored payment or credit approval.
Shipping information you give a customer by phone or on the internet overrides the advertised time, and you still need a reasonable basis for it. The FTC adds that if you do not keep records showing you can meet your shipping times, regulators can presume you lacked a reasonable basis.
What happens if you cannot ship on time?
First decide whether you can ship at all. If not, cancel and refund promptly. If you can ship later, you must tell the customer reasonably quickly, and no later than the promised time or 30 days.
The first delay notice has to include:
- A definite revised ship date, or a statement that you cannot give one.
- The customer’s right to cancel for a full, prompt refund.
- A way to cancel at your expense.
- If you give no date: the reason for the delay, and the right to cancel until shipment.
What happens if the customer does not answer depends on the new date. For a definite date of 30 days or less, you must say that silence means the customer agrees to the delay. For a date more than 30 days out, or no date, you must say the order will be cancelled automatically if the customer does not respond, unless it ships or the customer consents within the original time plus 30 days. For renewed notices, silence does not count as consent.
When must you cancel and refund?
The FTC lists several situations. You have to cancel and promptly refund when:
- the customer cancels before shipment;
- the customer does not respond in the required way to a delay notice and you have not shipped by the deadline;
- the customer agreed to a delay and you miss the agreed date;
- you did not send the required notices on time;
- you determine you will never be able to ship.
On timing, the guide says payments by cash, check, money order or third-party credit must be refunded within 7 working days after cancellation. If you used your own credit account, you credit the account or confirm no charge within one billing cycle. Store credit and vouchers are not acceptable substitutes for a required refund.
If nothing ships, you refund everything, including shipping, handling and insurance. If part ships, you refund the difference between what was paid and what the shipped items would have cost under your order terms.
A worked example
This is our own illustration. Say you sell a custom print for $60 plus $8 shipping, and you did not state a ship date. Day 30 passes and you cannot ship.
- You must send a delay notice by day 30 with a new date and a free way to cancel.
- If the new date is 14 days later, the notice has to say that silence counts as agreement.
- If the customer cancels, a full refund of $68 is due within 7 working days when paid by card.
- If you miss the new date too, you need fresh consent, and silence no longer counts.
For a small shop, the practical lesson is to state a realistic time in the listing. A claim of “ships in 3 days” that slips is harder to defend than “ships in 10 to 14 days” that you meet.
Other requirements to know
- Substitutions: You cannot send a materially different product without the customer’s prior express agreement.
- Insurance fees: If you charge for shipping insurance, you must honor valid loss claims with prompt reshipment or a refund.
- Unordered merchandise: Sending goods nobody asked for, or demanding payment for them, is prohibited.
- Dropshipping and fulfillment houses: The seller stays liable for violations by its fulfillment house or drop-shipper.
- Records: Not mandatory, but without them you bear the burden of proving compliance. The FTC advises keeping records for at least three years for consumer redress and five years for civil penalties, and checking state limits.
Some sales are exempt: serial subscriptions after the first compliant shipment, seeds and growing plants, collect-on-delivery orders, and services such as photo finishing, among others in the guide.
What can happen if you break the rule?
The FTC says it can seek injunctions, civil penalties of “up to $53,088 per violation” and consumer redress. The U.S. Postal Service and state consumer agencies can act too. In our assessment, the bigger day-to-day cost for a small seller is chargebacks and lost repeat customers.
If you use marketplaces, also read their own delivery rules, which can be stricter. Our guide to Amazon FBA versus FBM shows where fulfillment responsibility sits, and the one on the Amazon dropshipping policy covers what that marketplace allows.
Who this guide is not for
This is general information from one FTC page, not legal advice. Digital products, services and some preorders can fall under different rules. Ask a lawyer about your own case.
Frequently asked questions
What if I state a shipping time?
Then you need a reasonable basis to meet that time. The 30-day default applies when you do not clearly state a time.
Do I always need the customer’s permission to delay?
Not always. For a delay of up to 30 days past a definite date, silence counts as consent if your notice says so. For longer delays, you need a response or the order cancels.
How fast must I refund?
Within 7 working days for cash, check, money order or third-party credit, per the FTC guide. For your own credit account, within one billing cycle.
Can I offer store credit instead?
Not as a replacement for a required refund.
