In what is becoming an annual event, the US Federal Trade Commission (FTC) recently warned 72 online retailers that they had better live up to their delivery promises this holiday season.
Under the belief that online purchasing of holiday gifts this season may exceed that of previous years, Howard Beales, the director of FTC's bureau of consumer protection, said the agency wants to insure that consumers' expectations are met.
The online retail industry has a spotty record when it comes to delivering the holiday goods. The FTC sued seven companies that violated its Mail or Telephone Order Merchandise Rule during the 1999 holiday season, agency officials said. Forced to pay a total of $US1.5 million in fines due to order fulfilment problems, those companies included CDnow Online, KBkids.com, Macys.com, and Toysrus.com.
E-tailers fared better in 2000, perhaps in part because the FTC in November of 2000 warned 100 Internet sites not to exaggerate their delivery capabilities in the hope of enticing more Web surfers to make purchases.
This year, the FTC conducted a "surf" of 110 Web sites to ensure that retailers are making reasonable claims. Of those sites, agency staffers found that 52 were making "quick ship" claims, which promise delivery overnight, or within 24 or 48 hours, of in-stock items. While the claims themselves aren't an issue, an FTC spokesman said the agency sent warning letters to inform those retailers that living up to such promises can be difficult, and that FTC rules regarding the quick ship claim are strict: sites that promise to deliver within 48 hours but fail must notify customers before those 48 hours are up and give them the option to cancel.
For standard delivery claims, FTC rules say that the retailer must notify the customer about a delay within the specified delivery time, and provide an updated ship date. If a retailer does not specify to the customer when shipments will be made, the default time period is within 30 days of the order, according to FTC documents.
FTC staffers this year also warned 52 companies that their sites provided inadequate information about warranty policies.