Looking before they leap

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Most retailers and buyers approach a purchase with the best of intentions.  But let's face it: Glitch happens.  If a company sells a product with a warranty, consumers need up-front access to information about what the seller will do if things go south later.  That’s the thinking behind the FTC’s Rule about the Pre-Sale Availability of Written Warranty Terms.

If you sell items with a warranty and the purchase price is more than $15, the Rule requires you to make the text of the warranty "readily available" before consumers take the plunge.  That provision applies across the board regardless of whether you sell through a brick-and-mortar store, mail order, online, or any other way.

But an FTC staff survey suggests that some online retailers of appliances and electronics may not be living up to their legal obligations.  Those companies received a timely holiday greeting in the form of a staff warning letter raising concerns about whether their sites are abiding by the Rule.  Legal compliance might be a wise New Year’s resolution since the letters make clear that FTCers will be visiting the sites again in a few months to see if things have changed.

Whether or not your company got a letter – the names of recipients are nonpublic – now's a good time to check on your own practices.  Generally speaking, the Rule requires sellers to make warranty information readily available to consumers before the sale either:

  1. by displaying the warranty document "in close proximity" to the product; or
  2. by providing notice of the warranty document’s availability as the Rule specifies and then providing it upon request.

For online sales, the requirement to make warranties available at the point of purchase can be a snap – or shall we say a click?  For example, using a clearly labeled hyperlink – maybe something like "Get warranty information here" – near the description of the product could do the trick.  Read .com Disclosures: How to Make Effective Disclosures in Digital Advertising for general guidance.  Footnote 7 on page 3 is a good place to start.


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