--- title: "FTC Mail Order Rule refunds: 7 working days, no store credit" description: "When an order is cancelled because you couldn't ship it on time, the FTC Mail Order Rule says refund in full, shipping included, within 7 working days." canonical: https://resellerindex.com/seller-laws/ftc-mail-order-refunds/ last_updated: 2026-10-23 publisher: "The Reseller Index" --- # How fast must you refund an order you can't ship? Under the FTC's Mail Order Rule, when an order is cancelled because you couldn't ship it on time, or the buyer cancels using a delay option you offered, you must send a full refund within **seven working days** for nearly every payment method, or within one billing cycle only if you yourself are the buyer's creditor. The refund must include the shipping, handling and insurance charges the buyer paid for what didn't ship, and store credit, gift cards or vouchers don't count as a refund. General information about federal law, not legal advice. This page quotes the rule and the agency's own guidance; it can't tell you whether your business meets them, and state law and marketplace policies can add more. For your own situation, check with a lawyer. Mail, Internet, or Telephone Order Merchandise Rule (16 CFR Part 435). Checked against the official sources below on Oct 23, 2026. ## The rule, in its own words > “…a refund sent by any means at least as fast and reliable as first class mail within seven (7) working days of the date on which the buyer's right to refund vests under the provisions of this part.” 16 CFR 435.1(b)(1). [eCFR (Office of the Federal Register)](https://www.ecfr.gov/current/title-16/chapter-I/subchapter-D/part-435); eCFR, up to date as of Oct 21, 2026. > “When making Rule-required refunds, you cannot substitute credit toward future purchases, credit vouchers, or scrip.” FTC Business Guide, "How Much You Must Refund". [Federal Trade Commission](https://www.ftc.gov/business-guidance/resources/business-guide-ftcs-mail-internet-or-telephone-order-merchandise-rule); September 2011, edited January 2025. > “…you must refund the entire amount the customer “tendered,” including any shipping, handling, insurance, or other costs.” FTC Business Guide, "How Much You Must Refund". [Federal Trade Commission](https://www.ftc.gov/business-guidance/resources/business-guide-ftcs-mail-internet-or-telephone-order-merchandise-rule); September 2011, edited January 2025. > “Instructions sent to the entity that transferred payment to the seller instructing that entity to return to the buyer the amount tendered in the form tendered…” 16 CFR 435.1(d)(3)(i). [eCFR (Office of the Federal Register)](https://www.ecfr.gov/current/title-16/chapter-I/subchapter-D/part-435); eCFR, up to date as of Oct 21, 2026. ## When a refund becomes required Under 435.2(c), you must treat the order as cancelled and make a prompt refund whenever: - the buyer cancels before shipment using a delay option, renewed option or continuing option you gave under the rule; - you gave a revised date more than 30 days past the original deadline (or no date), and you neither shipped nor got the buyer's express consent within those 30 days; - you can't ship by a date in a renewed notice and the buyer didn't agree to a further delay; - you told the buyer you won't ship the item; or - you never offered the delay option and didn't ship on time. ## The deadline, by how the buyer paid *What counts as a "refund" (16 CFR 435.1(d)) and how fast it must go out (435.1(b)).* | How the buyer paid | What the refund is | Deadline | | --- | --- | --- | | Cash, check or money order | The amount returned as cash, check or money order | 7 working days | | Credit card from a bank or other third party | A credit memo to the card issuer removing the charge, with a copy to the buyer showing the date and amount, or a statement that no charge will be made | 7 working days | | Credit you extend yourself (a house account) | A credit memo or account statement showing the charge removed | One billing cycle | | Any other method, such as a payment service or payment processed by a marketplace | Instructions to the entity that transferred payment to return it in the same form, plus a statement to the buyer; or cash, check or money order; or a statement that no funds will be taken | 7 working days | | You can't refund the way they paid | Cash, check or money order | 7 working days from when you discover you can't | Counting Monday to Friday, a refund right that vests on Monday, Nov 30, 2026 has to be sent by Wednesday, Dec 9, 2026. The rule doesn't define "working days", so when a holiday falls in the window, send early rather than count on it. ## How much to refund, with numbers The FTC's guide: if nothing ships, refund everything the buyer paid. If some items ship, refund the difference between what they paid and what the shipped items would have cost under your ordering terms. A flat shipping fee charged regardless of the number of items can be kept when some items ship; shipping that rises with the number of items has to be prorated. *One order of three books at $12.00 each. Illustrative prices.* | Situation | Buyer paid | Refund | | --- | --- | --- | | None ship; $6.00 flat shipping | $42.00 | $42.00 | | Two of three ship; $6.00 flat shipping | $42.00 | $12.00 (the flat fee is kept) | | Two of three ship; shipping $3.00 per item ($9.00) | $45.00 | $15.00 ($12.00 book plus $3.00 shipping) | | None ship; $6.00 shipping plus $2.50 insurance | $44.50 | $44.50 | ## Edge cases - **A buyer who just changes their mind** before your deadline isn't one of the 435.2(c) triggers, which are tied to options and delays under the rule. Your own or your marketplace's cancellation policy may still require a refund. - **Lost after shipment is a different problem.** These deadlines are about merchandise you didn't ship. Once the carrier has the package it has shipped (435.1(e)). If you charge for shipping insurance, though, the FTC says you implicitly promise prompt reshipment or a prompt refund on a genuine claim of non-delivery. - **Coupons and proofs of purchase.** If the order was paid partly with promotional devices, the FTC says to give "reasonable compensation" for them plus any shipping and handling charges paid. - **First class mail speed.** The refund can go by any means at least as fast and reliable as first class mail (435.1(b)). A refund to the original card or payment account through the marketplace or processor is the method 435.1(d) describes for those payments. - **Gift cards have been an enforcement issue.** In a September 2023 settlement, the FTC alleged that an online shoe retailer issued gift cards instead of prompt refunds of the original payment for merchandise ordered but not shipped, among other Mail Order Rule violations; the company agreed to pay $1.95 million. The FTC's consumer advice puts it plainly: a seller that doesn't ship has to give a full refund, "not just a gift card or store credit." ## What to do 1. Log the date each order's right to a refund vests (the 435.2(c) trigger). 2. Issue the refund through the same channel the buyer paid, the same day if you can. 3. Refund shipping, handling and insurance on anything that didn't ship, prorating per-item shipping. 4. Never send store credit or a gift card in place of a rule-required refund; the refund goes back the way the buyer paid. 5. Keep the refund date and amount with the order record. ## Penalties, as the agency states them The FTC's guide states the consequences this way: > “Merchants who violate the Rule can be sued by the FTC for injunctive relief, monetary civil penalties of up to $53,088 per violation…” FTC Business Guide to the Mail Order Rule, "Why You Should Comply with the Rule". [Federal Trade Commission](https://www.ftc.gov/business-guidance/resources/business-guide-ftcs-mail-internet-or-telephone-order-merchandise-rule); September 2011, edited January 2025. ## Questions ### Is a gift card or store credit ever enough? Not for a refund the rule requires. The FTC says you cannot substitute credit toward future purchases, credit vouchers or scrip. ### Do I refund shipping? Yes, if nothing shipped: the FTC says the entire amount tendered, including shipping, handling, insurance or other costs. On partial shipments, keep only the shipping that applies to what you shipped. ### What counts as a working day? The rule doesn't define it. Counting Monday to Friday is the plain reading; send early around holidays. ## Related questions - [What must a shipping delay notice say under the FTC rule?](https://resellerindex.com/seller-laws/ftc-shipping-delay-notice/) Before your deadline, offer the buyer a choice: accept the delay or cancel for a prompt refund. Silence counts as consent only for a new date 30 days or less out. - [Does the FTC 30-day shipping rule apply to online resellers?](https://resellerindex.com/seller-laws/ftc-30-day-shipping-rule/) Yes. Ship within the time your listing states, or 30 days if it states none; "shipped" means in the carrier's possession, not a printed label. - [Can you sell used items "as is"? What federal warranty law says](https://resellerindex.com/seller-laws/magnuson-moss-as-is-used-goods/) Usually, under state law. But a written warranty such as “guaranteed to work for 30 days” means you can't disclaim implied warranties on that item. Also on this site: [USPS holiday shipping deadlines](https://resellerindex.com/rates/usps-holiday-shipping-deadlines-2026/) · [USPS for resellers](https://resellerindex.com/usps/) [All 14 federal rule questions for online resellers](https://resellerindex.com/seller-laws/) ## Sources Every rule, number and date on this page comes from these official pages, each read on Oct 23, 2026; quotes are copied word for word. General information, not legal advice. - [16 CFR Part 435: Mail, Internet, or Telephone Order Merchandise](https://www.ecfr.gov/current/title-16/chapter-I/subchapter-D/part-435) (eCFR (Office of the Federal Register); eCFR, up to date as of Oct 21, 2026) - [FTC: Business Guide to the FTC's Mail, Internet, or Telephone Order Merchandise Rule](https://www.ftc.gov/business-guidance/resources/business-guide-ftcs-mail-internet-or-telephone-order-merchandise-rule) (Federal Trade Commission; September 2011, edited January 2025) - [Federal Register, Sep 17, 2014 (79 FR 55615): final amendments renaming the rule the Mail, Internet, or Telephone Order Merchandise Rule](https://www.govinfo.gov/content/pkg/FR-2014-09-17/html/2014-22092.htm) (Federal Register (GPO, govinfo.gov); Sep 17, 2014) - [FTC press release: settlement with an online shoe retailer over suppressed negative reviews and Mail Order Rule violations](https://www.ftc.gov/news-events/news/press-releases/2023/09/online-shoe-seller-hey-dude-inc-pay-195-million-violating-ftcs-mail-internet-telephone-order-rule) (Federal Trade Commission; Sep 11, 2023) - [FTC Consumer Advice: What To Do if You're Billed for Things You Never Got, or You Get Unordered Products](https://consumer.ftc.gov/articles/what-do-if-youre-billed-things-you-never-got-or-you-get-unordered-products) (Federal Trade Commission; August 2022) Subscribe: https://resellerindex.com/subscribe/ Want these numbers next to your own sales? 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