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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
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