N.Y. General Business Law § 396-m: Mail-order or telephone-order merchandise

§ 396-m. Mail-order or telephone-order merchandise. 1. This section

shall apply to any mail-order business or any telephone order business

which is located in this state or advertises a New York state mailing

address or telephone number.

2. Definitions, as used in this section:

a. "mail-order business" shall mean a business which is engaged in the

solicitation of orders by advertisement or otherwise for merchandise or

services connected with merchandise to be shipped to the customer

through the mail or by other carrier, upon receipt of an order with

payment or with charge account authorization remitted through the mail,

electronic mail or the Internet or by telephone and the merchandise by

its nature is ready for use or consumption when advertised or offered

for sale and can be held in stock.

b. "merchandise" shall mean tangible chattels bought for personal,

family or household purposes.

c. "shipment" shall mean the act whereby the seller physically places

the merchandise into the possession of the United States postal service

or other carrier.

d. "telephone order business" shall mean a mail order business which

accepts orders by telephone, or a business which is primarily engaged in

the solicitation of orders by advertisement or otherwise for merchandise

or services connected with merchandise to be shipped to the customer

through the mail or by other carrier, upon receipt of an order with

charge account authorization remitted by telephone and the merchandise

by its nature is ready for use or consumption when advertised or offered

for sale and can be held in stock.

e. "accepts orders" shall mean, in the case of a mail order, receipt

of an order with payment or with charge account authorization remitted

through the mail, electronic mail or the Internet, and, in the case of a

telephone order, receipt of an order with charge account authorization

and debiting the buyer's account.

3. No person, partnership, firm, association or corporation or agent

or employee thereof who conducts a mail-order business or a telephone

order business shall:

a. advertise for sale merchandise which is not reasonably anticipated

to be available for shipment within thirty days from date of publication

or broadcast of advertisement or from date catalog or circular is

mailed, unless a longer period of time is clearly and conspicuously

stated in such advertisement. Whenever the term "thirty days" appears in

this section, such term shall include a longer period of time if clearly

and conspicuously stated in such advertisement.

b. accept orders for merchandise which is not reasonably anticipated

to be available for shipment within thirty days from the date of receipt

of the order together with payment or with charge account authorization

in the case of an order remitted through the mail, electronic mail or

the Internet or within thirty days from the date the seller debits the

buyer's account in the case of an order placed by telephone.

c. unless the seller qualifies and elects to be governed by paragraph

i, fail to either ship ordered merchandise or issue a refund (if payment

has been remitted) for ordered merchandise which is not available within

thirty days of receipt of order and payment therefor.

d. unless the seller qualifies and elects to be governed by

paragragraph i, fail to either ship ordered merchandise or issue a

credit (if charge-account authorization has been given and exercised by

seller) for ordered merchandise which is not available within thirty

days of receipt of order and charge-account authorization therefor.

e. fail to issue a refund or credit the customer's account if

promised, upon demand of the customer within thirty days from the date

of receipt of request for such refund provided the merchandise has been

returned, if required.

f. fail to maintain a record of each complaint alleging failure to

ship merchandise or furnish services connected with merchandise

solicited and ordered on a pre-paid basis and the disposition of each

such complaint. Such record shall be kept for a period of at least

eighteen months following the disposition of such complaint.

g. fail to maintain records showing the employment of systems and

procedures designed to comply with requirements of this subdivision.

h. fail to prominently feature in all advertising or other promotional

materials containing a post office box address including order blanks

and forms, the legal name of the company soliciting the order, the

complete street address of such company and under what conditions a

refund will be issued including but not limited to whether a refund will

be issued:

(i) at any time, or not beyond a point in time specified; or

(ii) in cash, or as credit or in-house credit only. This paragraph

shall not apply to a mail-order business that has a policy of accepting

returns, for a period of not less than twenty days after the date of

delivery of merchandise to the customer and providing a cash refund for

a cash purchase or providing a cash refund or issuing a credit for a

credit purchase, which credit is applied to the account on which the

purchase was debited, in connection with the return of its unused and

undamaged merchandise. Provided, however, that nothing contained herein

shall prohibit a mail-order business from applying a cash payment for

returned merchandise towards a prior outstanding balance. Provided,

further, that nothing contained herein shall be deemed to require a cash

refund of less than one dollar where the mail-order business provides

in-house credit for such sum.

i. where the seller, due to circumstances beyond his control, is

unable to make shipment within the time required by this section, the

provisions of paragraphs c and d of this subdivision shall not apply if

the seller elects to be governed by this paragraph and does either of

the following:

(i) sends to the buyer a notice of delayed shipment, stating the

duration of the expected delay, providing the buyer with the opportunity

to express his choice whether to cancel his order and receive a refund,

be shipped the merchandise or be furnished the services by a specified

later date, or to accept substitute merchandise of equivalent or

superior quality. If the seller proposes to substitute merchandise, he

shall describe it in detail, indicating how it differs from the goods

ordered. The notice shall be sent by first class mail and accompanied by

a self-addressed, postage paid device upon which the buyer may indicate

his choice, and mailed in advance of the expiration of the thirty day

period, or that time stated in the solicitation. The notice shall

expressly advise the buyer that the order will be immediately cancelled

and a refund forwarded where the buyer does not choose otherwise by

response within thirty-five days of the date of mailing by the seller of

the above notice. If, prior to shipment, the seller receives a response

from the buyer requesting refund, such refund shall be promptly made. If

no response is received prior to the expiration of the thirty-five day

period after the date of the mailing by the seller of the above notice,

the seller shall make a prompt refund.

(ii) send the customer substitute merchandise of equivalent or

superior quality, if the customer is extended the opportunity to return

the substituted merchandise and the seller promises to refund to the

customer the postage cost of returning such merchandise together with

any portion of the purchase price previously paid by the customer. Prior

to or at the time of shipment of the substitute merchandise, a notice

shall be provided to the customer stating the right to obtain a refund

and reimbursement for the postage cost incurred in returning the

substituted merchandise.

For purposes of subparagraphs (i) and (ii) of this paragraph,

merchandise may not be considered of "equivalent or superior" quality if

it is not substantially similar to the merchandise ordered, or not fit

for the usual purposes for which such merchandise is used, or if the

seller normally offers the substituted merchandise at a price lower than

the price of the merchandise ordered.

j. (i) in the case of an order for merchandise placed by telephone or

by electronic means, accept an additional fee for expedited mailing or

shipping, which is in excess of the lowest charge the seller would

accept, in the regular course of business, for mailing or shipping of

the merchandise ordered, when the seller does not reasonably expect such

merchandise to be mailed or shipped within the next three business days

after the order was placed, unless:

(A) the seller notifies the buyer, at the time the order is placed but

before payment is accepted, that the seller anticipates that the

merchandise will not actually be mailed or shipped within the next three

business days after the order is placed; or

(B) the seller contacts the buyer, by telephone or by electronic

means, within the next three business days after the order was placed to

inform the buyer:

(a) that the mailing or shipping of the merchandise ordered is not

reasonably anticipated to occur within the next three business days

after the order was placed;

(b) of the date the seller reasonably anticipates the merchandise

ordered to be mailed or shipped;

(c) that, at the buyer's option, the buyer may:

(1) accept the reasonably anticipated delay in mailing or shipping; or

(2) cancel the order and refund payment to the buyer within thirty

days; or

(3) elect to have the merchandise ordered mailed or shipped in the

regular course of business and refund the additional fee for expedited

mailing or shipping to the buyer within thirty days; and

(d) that, if the seller does not receive a response on the next

business day, the seller will mail or ship the merchandise ordered, in

the manner originally requested by the buyer. Provided, however, that

should the buyer contact the seller before the merchandise ordered has

been mailed or shipped, nothing in this section shall be construed to

preclude the seller from agreeing to any modifications to the buyer's

order which are agreed to by both the buyer and seller.

(ii) (A) For the purposes of this subdivision, a seller shall be

considered to have mailed or shipped a buyer's merchandise when the

seller causes such merchandise, and applicable postage or shipping fee,

to be physically placed in the possession of the United States Postal

Service or other carrier. Nothing in this section shall impose any

liability on the seller for delays solely attributable to the postal

service or carrier.

(B) A statement or notice contained in the advertising material for

the merchandise, in a description of the merchandise, or in a

description of the mailing and shipping options available to the buyer,

which advises the buyer of the approximate time the seller reasonably

anticipates the merchandise to be mailed or shipped, shall satisfy the

notification requirements of this section.

4. Whenever there shall be a violation of this section, an application

may be made by the attorney general in the name of the people of the

state of New York to a court or justice having jurisdiction to issue an

injunction, and upon notice to the defendant of not less than five days,

to enjoin and restrain the continuance of such violations; and if it

shall appear to the satisfaction of the court or justice that the

defendant has, in fact, violated this section, an injunction may be

issued by such court or justice, enjoining and restraining any further

violation, without requiring proof that any person has, in fact, been

injured or damaged thereby. In any such proceeding the court may make

allowances to the attorney general as provided in section eighty-three

hundred three, subdivision six of the civil practice law and rules, and

direct restitution. In connection with any such proposed application,

the attorney general is authorized to take proof and make a

determination of the relevant facts and to issue subpoenas in accordance

with the civil practice law and rules.