Shipping Late? What the FTC Mail Order Rule Requires

Most online merchants know a late order can cost them a chargeback. Fewer know it can also break a federal rule. The FTC's Mail, Internet, or Telephone Order Merchandise Rule, usually called the Mail Order Rule, sets when you must ship, what you must tell a customer when you can't, and how fast you must refund. This guide covers what the rule requires as of October 2026, where Visa's rules on charging for shipped goods overlap with it, and how the same delay plays out in a "merchandise not received" dispute. The rule text is from the Electronic Code of Federal Regulations (16 CFR Part 435). The Visa material is from the Visa Core Rules and Visa Product and Service Rules dated 18 April 2026.

What the Mail Order Rule covers

The rule applies to sales in which a buyer orders merchandise from the seller by mail, over the internet or by telephone, "regardless of the method of payment or the method used to solicit the order." The FTC added the internet to the rule's name and text in a 2014 amendment that took effect on December 8, 2014. A checkout page, a phone order taken through a virtual terminal and an order placed by email are all covered.

A few things are carved out. The rule does not apply to:

• Subscriptions such as magazines ordered for serial delivery, after the first shipment has been made in compliance with the rule
• Orders of seeds and growing plants
• Cash-on-delivery (C.O.D.) orders
• Prenotification negative option plans covered by the FTC's separate rule at 16 CFR Part 425
• Services. The FTC's business guide gives mail-order photo finishing as an example

Using a fulfillment house or a drop-shipper does not shift the obligation. The FTC's guide answers that question directly: the person soliciting the order, not the agent fulfilling it, is the seller under the rule. If your supplier ships late, the late shipment is yours.

The shipping deadline: the time you state, or 30 days

When you solicit an order, you must have a reasonable basis to expect that you can ship within the time you clearly and conspicuously state. If you state no time, you must have a reasonable basis to expect to ship within 30 days of receiving a properly completed order. That becomes 50 days when the buyer applies to you for credit to pay for the purchase at the time of the order.

Three details catch merchants out.

• Shipping, not delivery. The rule defines shipment as the act of physically placing the merchandise in the carrier's possession. Its deadlines are about when the parcel leaves you.
• The clock starts at a properly completed order. That means the point at which you have both the payment or authorization and all the information you need to process and ship the order.
• Your own promise sets the deadline. The 30-day default only applies when you say nothing. If your site says "ships in 24 hours," 24 hours is the deadline. The FTC's guide says that if you represent that you ship in 48 hours most of the time, you will be required to ship, or send a delay notice, within 48 hours all the time.

The rule also makes records central. In an FTC action, if a seller has no records showing it uses systems and procedures that ensure shipment within the applicable time, the rule creates a rebuttable presumption that it had no reasonable basis for its shipping claims. A similar presumption applies to the delay and refund requirements below. The FTC's guide lists the records to keep for each order: the date you received it, the date and contents of any delay notice, the date the customer exercised any cancellation option, the date of shipment and what was shipped, and the date of any refund and what it covered.

When you can't ship on time: the delay option notice

If you cannot ship within the deadline, you must offer the buyer a choice: consent to the delay, or cancel the order and get a prompt refund. You must offer it clearly and conspicuously, without waiting for the customer to ask, within a reasonable time after you learn of the problem and in any case before the original deadline passes. The FTC's guide says you can give the notice by any means, including telephone, mail or email. You must also give the buyer an adequate way to respond, at your expense.

The notice must tell the buyer about the right to cancel and get a prompt refund, and it must give a definite revised shipping date. If you have no reasonable basis for a definite date, the notice must say that you cannot say how long the delay will be, and it must explain why. What silence from the customer means depends on how long the delay is:

• A revised date 30 days or less after the original deadline. The notice must say that the buyer will be treated as consenting to the delay unless they cancel before you ship and before the revised date passes.
• A revised date more than 30 days after the original deadline, or no date at all. The notice must say that the order will be cancelled automatically unless you ship within 30 days of the original deadline or the buyer expressly agrees to the delay within that time. A buyer who agrees to an indefinite delay keeps the right to cancel at any time before you ship.
• A second delay. If you then miss the revised date the buyer accepted, you must offer a renewed option. This time, silence counts as cancellation if you cannot ship by the old revised date, unless the buyer expressly consents to the further delay or has already agreed to an indefinite one.

You can always choose to cancel the order yourself. You do that by notifying the buyer within a reasonable time after you learn you can't ship, and sending a prompt refund.

What counts as a prompt refund

Once a buyer's right to a refund arises, through cancellation, automatic cancellation or your own decision not to ship, the rule sets how fast the money must move, and the deadline depends on how the customer paid.

• Ordinary credit card orders, where a bank issued the card. You must send a credit memorandum to the card issuer to remove the charge, and send the buyer a copy showing the date and amount. Alternatively, if you never took any action that would put a charge on the account, you can send a statement saying so. Either way, you have seven working days.
• Store credit accounts where you are the creditor. You must send a credit memo or account statement within one billing cycle. This is the only case where the rule allows a billing cycle. It does not extend to bank-issued cards.
• Cash, check or money order. You must return the amount within seven working days.
• Every other payment method, which would generally include debit cards, ACH and payment apps. You must instruct the entity that transferred the payment to return it to the buyer in the form tendered, and send the buyer a statement of those instructions. Alternatively, you can return the money by cash, check or money order, or confirm in writing that you have not accessed the buyer's funds. The deadline is seven working days.

Two other rules go with these. A refund must be a refund. The FTC's guide says you cannot substitute credit toward future purchases, credit vouchers or scrip. If you ship only part of an order, you must refund the difference between what the buyer paid and what the shipped items cost. And unless the customer expressly agrees beforehand, you cannot replace the ordered item with merchandise that is materially different.

Where Visa's rules meet the Mail Order Rule

Card network rules add a payments layer to the same timeline. Three Visa provisions matter most to merchants that ship goods.

Charging before you ship

Visa's deposit rules say a merchant must not submit a deposit for a transaction until the transaction is completed or the merchandise or services are shipped or provided. The exception is when the cardholder has paid an advance payment. Separately, for a transaction involving goods that are shipped, other than an advance payment, the transaction date must be on or after the date the goods are shipped.

Advance payments are limited. Visa permits an advance payment for the entire purchase amount, before delivery, only from these merchant categories:

• Travel and entertainment (T&E) merchants
• Merchants selling custom goods or services
• Face-to-face sales where some items are not immediately available and will be shipped later
• Recreational services or activities related to tourism and travel

Even then, the terms must specify the shipping date. A standard online store taking full payment for an out-of-stock or preorder item is outside that list. The approach consistent with these rules is to authorize at checkout and capture when the order ships. Confirm the details with your processor.

Authorizations don't wait forever

Visa's table of approval validity periods gives a cardholder-initiated, card-absent transaction 10 calendar days from authorization. It gives 30 calendar days where the transaction carries an extended authorization indicator. Visa also says an incremental authorization does not extend these timeframes. A delay that pushes shipment past the authorization's validity creates a payments problem as well as a Mail Order Rule problem. Ask your processor how it handles an authorization that expires before the order ships.

Split shipments

A card-absent merchant that ships goods may use one authorization for several clearing transactions to support a split shipment. To do so, it must disclose in writing, on its website or in its app that an order may arrive in multiple shipments, and tell the cardholder the amount of each shipment as it goes out. Combined with the Mail Order Rule, that means: ship what you have, charge for what you shipped, and give the buyer the delay option for the rest.

How a late order becomes a chargeback

The customer's other remedy is the card dispute. Under Visa dispute condition 13.1, Merchandise/Services Not Received, an issuer can dispute a transaction when the cardholder did not receive the merchandise because the merchant was unwilling or unable to provide it. Several parts of that condition line up with the Mail Order Rule:

• Before the issuer can dispute, the cardholder must try to resolve the problem with the merchant. A clear delay notice with a working cancellation route gives that contact somewhere to go other than the bank.
• The dispute is limited to the portion of the merchandise not received. That matches the partial-shipment refund rule.
• If merchandise was delivered late, the cardholder must return or attempt to return it.
• The dispute is invalid when the cardholder cancelled before the expected delivery date, for example from buyer's remorse. That does not cancel a refund you owe under the Mail Order Rule. The legal obligation stands on its own.

The timing follows the delivery date you gave. When no delivery date was specified, the issuer must wait 15 calendar days from the transaction date before disputing. It can dispute within 120 calendar days of the transaction processing date, or within 120 days of the last date the cardholder expected to receive the merchandise, up to 540 days after processing. For a purchase to be delivered later, an issuer that disputes early must explain why it filed before the expected delivery date. Our guide to chargeback time limits covers these windows across dispute types.

Your response depends on evidence. To answer a 13.1 dispute for delivered goods, Visa requires proof of delivery that contains the full delivery address. Tracking with a partial address is not permitted. At the pre-arbitration stage, the issuer can answer your evidence of a different delivery date with evidence of the expected delivery date that was given to the cardholder. That means the date on your product page or confirmation email becomes the measure. For dispute responses processed on or after 18 April 2026, when you provide delivery evidence, the issuer must certify that it reviewed that evidence with the cardholder and must address it. If you sent a photo, it must acknowledge the photo. If you sent a signed proof of delivery, it must address the signature.

Enforcement and penalties

The Mail Order Rule is an FTC trade regulation rule, so violations carry civil penalties. The maximum under Section 5(m)(1)(A) of the FTC Act is $53,088 per violation. That is the 2025 level, which the FTC said in a Federal Register notice on September 15, 2026 would stay unchanged during 2026. The FTC's guide says it can seek penalties for violations at any time during the five years before it files a complaint.

The best-known recent case is Fashion Nova. In April 2020, the online retailer agreed to pay $9.3 million for consumer refunds to settle FTC charges. The FTC said the company advertised fast shipping but often failed to ship on time, did not give customers the required notice and option to cancel, and used gift cards instead of refunds for unshipped items. As the FTC's business blog put it, a gift card isn't a refund under the rule.

State law also applies. The rule does not preempt state or local laws that give buyers equal or greater rights, so a state consumer-protection statute can sit on top of the federal requirements.

A compliance checklist for online merchants

1. Make every shipping-time claim on your site one you can meet on every order, not on most orders. If you can't, state a longer time.
2. Treat "ships in X days" as a legal deadline. If you make no claim, your deadline is 30 days from a complete order.
3. Make your order system record, for each order, the order date, any delay notice and its contents, any cancellation, the shipment date and contents, and any refund.
4. Write delay notice templates for each of the three cases: a delay of 30 days or less, a longer or indefinite delay, and a second delay. Make sure each states the cancellation right plainly and gives a free way to respond.
5. Refund card orders within seven working days of cancellation, to the original payment method. Never use store credit as a substitute.
6. Authorize at checkout and capture at shipment unless your business falls within one of Visa's permitted advance payment categories. Know what happens when an authorization expires before you ship.
7. If you split shipments, disclose that at checkout and notify the customer of each shipment's amount.
8. Keep proof of delivery with the full delivery address for every shipped order. That is the evidence a not-received dispute requires.
9. Hold your fulfillment partners to your deadlines. Under the rule, their delays are your violations.

For merchants in higher-risk categories this reaches the merchant account too. Not-received disputes count toward the dispute ratios that card network monitoring programs track, so a backlog of late orders can push a merchant toward a threshold. The steps that keep you compliant with the Mail Order Rule also prevent many of those disputes.