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This entry was published on 2014-09-22
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SECTION 396-M
Mail-order or telephone-order merchandise
General Business (GBS) CHAPTER 20, ARTICLE 26
§ 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.