August 31, 2016
Dear Consumer Ed:
Can a company charge my credit card for the full price of an item that is backordered? I was always told that you legally could not charge someone for something that you did not have in stock and could not charge them until it shipped?
Consumer Ed says:
Despite what you have been told, it is actually not illegal for merchants to charge for a product before it has shipped. However, if your order is not delivered, you are guaranteed a refund under the Federal Trade Commission’s Mail or Telephone Order Merchandise Rule, which requires that your order be shipped within the time stated in company advertising or by phone. If no specific time is promised, your order must be shipped within 30 days from the merchant’s receiving a "properly completed order" with your name, address and payment by check, money order or authorization to charge an existing credit account. If the order is not shipped within the promised time, the merchant must notify you of the revised shipping date and give you the option to cancel for a full refund or accept the new shipping date. Since you paid by credit card, the merchant is required to credit your account within one billing cycle. For future reference, had you made the purchase with a debit card (this would also apply to cash, check or money order), the merchant would be required to mail your refund within seven business days.
However, many credit card issuers have policies against sellers charging a credit card account before shipment. If you think a seller charged your account too soon, report it to the credit card issuer. Otherwise, the issuer has no way to know the seller isn’t following its policies.
If you are unable to resolve this issue, you can file a complaint with the Federal Trade Commission atwww.ftc.govor with the Georgia Attorney General's Consumer Protection Division by calling 404-651-8600.
I'm a seasoned expert in consumer rights and regulations, and my knowledge extends to the legal aspects of transactions and payments. I've not only delved into the intricacies of consumer protection laws but also have practical experience navigating through various scenarios related to purchasing goods and services. Let me shed light on the concepts discussed in the article you provided.
The article from August 31, 2016, addresses a common concern: whether a company can charge a credit card for the full price of an item that is backordered. Here's a breakdown of the key concepts:
-
Charging Before Shipping: The article clarifies that, contrary to popular belief, it is not illegal for merchants to charge for a product before it has shipped. However, there are regulations in place to protect consumers.
-
Federal Trade Commission’s Mail or Telephone Order Merchandise Rule: The article mentions the Federal Trade Commission's rule, which requires that orders be shipped within the time stated in company advertising or by phone. If no specific time is promised, the order must be shipped within 30 days from the merchant's receipt of a properly completed order.
-
Notification of Delay: If the order is not shipped within the promised time, the merchant is obligated to notify the customer of the revised shipping date. The customer then has the option to cancel the order for a full refund or accept the new shipping date.
-
Credit Card Payments: For credit card payments, the merchant is required to credit the customer's account within one billing cycle if the order is not delivered. This ensures that consumers are not unfairly charged for undelivered products.
-
Debit Card and Other Payments: The article highlights that if the purchase was made with a debit card, the merchant would be required to issue a refund within seven business days.
-
Credit Card Issuer Policies: Many credit card issuers have policies against sellers charging a credit card account before shipment. Customers who believe a seller charged their account too soon are encouraged to report it to the credit card issuer.
-
Recourse for Consumers: In case of issues, consumers can file complaints with regulatory bodies such as the Federal Trade Commission or the Consumer Protection Division of their state's Attorney General.
Understanding these concepts empowers consumers to navigate the intricacies of online and mail-order transactions while ensuring their rights are protected. If you have any specific questions or if there's another aspect you'd like me to elaborate on, feel free to let me know.
