Your Order Never Shipped: What the FTC Said Fashion Nova Owed Its Customers

A late package is annoying. A late package that you were not allowed to cancel, or that ends with a gift card instead of your money, can break the law. The Federal Trade Commission (FTC) alleges that is what happened to some Fashion Nova customers, in a $9.3 million settlement.

The rules for sellers

Under the law, a seller that cannot ship on time must tell the customer about the delay and offer the right to cancel with a full refund. When merchandise is never shipped, the seller owes a refund, not a gift card or store credit.

The FTC alleged that Fashion Nova failed to notify customers properly and give them the chance to cancel when it did not ship merchandise in a timely way, and that it also illegally paid customers with gift cards for unshipped goods in place of refunds. The $9.3 million will be used to compensate people who received gift cards from Fashion Nova rather than their money back.

Three habits for online shopping

The FTC's online shopping infographic (Federal Trade Commission).

1. Search the seller. If a deal looks good but you do not know the product or the company, search its name along with words like "review," "complaint" or "scam." Bad reviews do not settle the question, but they tell you what risk you are weighing.
2. Read the terms. Check the refund policy and delivery dates: can you return the item for a full refund, who pays return shipping or restocking fees, and when will the order arrive?
3. Pay by credit card. The Fair Credit Billing Act protects the transaction. It lets you dispute charges in certain situations and temporarily withhold payment while the card company investigates.

If a purchase goes wrong, first try to settle it with the seller. If that fails, report it to the FTC at ftc.gov/complaint.

Sources

• Federal Trade Commission, FTC: Fashion Nova failed to deliver the goods, Consumer Alerts; rewritten in hubnx's own words.