Mail-Order Business

Another FTC rule requires all mail-order advertising to indicate the country of origin of the product being advertised if the product has a fabric as part of its content. This rule was designed to protect domestic textile and wool producers. Mail-order businesses are also subject to FTC guidelines concerning product guarantees and warranties that apply to all businesses.

Mail-order advertising frequently contains endorsements or testimonials. Under FTC guidelines, any endorsement must reflect the views of the endorser, and must not be reworded or taken out of context. In addition, the endorser must be a genuine user of the product. If the endorser has been paid, the ad must disclose that fact, unless they are celebrities or experts. Additional FTC rules apply specifically to endorsements by average consumers and expert endorsements.

The FTC has also issued guidelines to curb deceptive pricing by some mail-order businesses. These rules affect two-for-one offers, price comparisons, and other issues. The practice of advertising products that have yet to be manufactured, while legal, is subject to FTC requirements as well. FTC regulations call for this advertising practice, also called dry testing, to clearly state that sale of the product is only planned and that it is possible that consumers who order the product may not receive it. In addition, if the product is not manufactured, consumers who ordered it must be notified within four months of the original ad or mailing, and they must be given the opportunity to cancel their order without obligation.

In addition to FTC regulations, mail-order businesses must also be aware of USPS regulations. Lotteries, for example, are illegal under USPS regulations. As defined by the USPS, a lottery includes the element of chance, consideration—a term that means that one must make a purchase to enter—and a prize. In recognition of this definition, mail-order businesses instead organize sweepstakes that do not require any consideration, payment, or purchase on the part of the consumer. While sweepstakes have proved to be an effective method of advertising mail-order merchandise, many states have laws affecting their use.

Post office operations can impact on a mail-order enterprise in other ways as well. A mail-order house that presorts direct mailings by zip code can sometimes lower its postage costs, for example, while business-reply cards are subject to the approval of your postmaster. For complete information on postal rates, regulations, and requirements that could potentially impact a mail-order (or any other) business, contact your local post office or the Customer Programs Division of the U.S. Postal Service, Washington, DC 20260.

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