• by Kate Kaye , December 4, 2002

The Bush administration isn’t the only part of the Federal government that’s partial to preemptive strikes. Since the mishap-ridden e-commerce holiday season of 1999, The Federal Trade Commission has taken to tapping e-tailer shoulders before the shopping season to say, “Hey, listen up: the offline rules apply to you too!”

This year, 51 of the 63 unnamed online retailers that were involved in the "HolidaySmarts2.com" surf effort received snail mail letters stating, "We want to make certain that you know that online sales are governed by many of the FTC-enforced statutes and regulations that apply to other forms of marketing and advertising."

There’s no need to panic, assures Elaine Kolish, associate director for enforcement at the FTC. “We’re taking a quick look at a few points. They’re not investigations. We haven’t brought actions against these companies.” According to Kolish, this year’s inspection, which took place in early November, revealed “fewer problems than during the 2000 and 2001 holiday seasons.”

Last year, the FTC sent letters to 72 of 110 sites surfed. However, comparisons don’t necessarily apply since this year the FTC aimed to analyze sites it hadn’t in previous years. The commission focused this particular consumer protection project on Web retailers selling what the National Retail Federation deemed popular items for this shopping season, including music CDs, books, apparel and electronics. Four main factors were considered: quick ship promises, rebate claims, warranty information and product country-of-origin disclosures.

Promises to ship within 24 to 48 hours after an order is placed were made by 51 of the 63 sites in question. Of the 23 warranted product purveyors, 14 “failed to provide adequate information about these warranties.” Nineteen sites made rebate claims, and two apparel sellers neglected to make country-of-origin disclosures such as "Made in USA" or "imported" or both. Letters reminded retailers of the best ways to comply with FTC regulations regarding these criteria.

Regardless of FTC finger-wagging, most retailers have every intention of upholding the law, comments Scott Silverman, executive director of Shop.org, the online retail division of the National Retail Federation. “It seems that what the FTC is attempting to do is ensure that customers who buy online are satisfied and that it’s a fair transaction; responsible retailers strive for those values everyday.”

As part of its “2002 Online Holiday Mood Study” conducted during the first two weeks of November in conjunction with BizRate.com, Shop.org determined that order fulfillment time is the same or better than last year, and 94% of retailers are not experiencing any shipping delays. In addition, during those two weeks, “60 percent of retailers posted revenue increases of 25 percent or greater compared to the same period last year,” and “almost half” of online buyers are “very satisfied” with their online shopping experiences this year.

Still, considering what Kolish refers to as the “big fiasco of 1999” after which the FTC took action against seven online retailers for shipping violations, it’s not surprising that the commission has such a precautious attitude. The Project TooLate.com effort resulted in payment of more than $1.5 million in civil penalties or consumer redress by retail offenders.