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IV
RULES AND REGULATIONS

Since you are planning to start your own business, you need to be familiar with some of the rules that govern this industry. For all intents and purposes, this information leans towards a mail-order type of business, especially if you plan to offer your information products in hard-copy form. (However, most of this information is valid for most business models.) As long as you plan to run your business on the up-and-up, you should have no problems with any of the laws on the books.

Let’s run through the major issues and see how they will pertain to you and your new business. Although there are many more regulations than what we will cover here, the thing to remember is: Don’t cheat anyone out of their hard-earned money. When you run an honest business, you stand a much better chance at success. Here are some of the basics.

The Mail-Order Rule

The Federal Trade Commission passed this rule in 1975. It is also known as the 30-day rule. It states that any order solicited through the mail must be shipped within 30 days after receipt of payment. When you are soliciting orders for your product, you must believe that you can fill these orders within 30 days or specify the length of time it will actually take. Example: “Please allow five weeks for delivery.”

If you do not ship within 30 days or the specified time, you must notify the buyer of the delay and give them the option of either canceling their order or accepting the delay. You must refund payment on any canceled orders promptly. This rule has been recently amended to include all orders taken over phone lines as well as through the mail. This rule is strictly enforced and should be taken very seriously.

Truth in Advertising

This can be summed up quite simply. It is unlawful to mislead the public in any way. You must describe the product being advertised clearly, without making any false claims or omitting any important facts that the average person would need to know. Also, the word “NEW” should be avoided when advertising, since it only gives an accurate description of your product for the first six months of its existence. Also, the price of the item must be clearly stated in your advertisement. Be careful when stating prices. It is unlawful to claim that the price of your item was formerly higher than the current asking price, unless you actually sold a substantial number of items at that higher price.

TESTIMONIALS

Any testimonials given must be genuine and authorized by the person who gave them. You should be prepared to show proof of any testimonials, and they should be of an honest nature.

GUARANTEE’S

When giving a guarantee, it must give details of how it is carried out. Example: “If you are not completely satisfied with the product, return it in reasonably good condition within thirty days for a full refund.” This clearly states the length of the guarantee and the conditions.

Keep in mind, these regulations have been put into place to protect the public. Unfortunately, since the early days of traditional mail-order, there have been many companies that have operated in an illegal and deceitful manner. These companies have come and gone like the wind, and any companies started based on unlawful premises in the future are sure to meet the same fate. As you can clearly see, as long as you operate your mail-order operation honestly, you’ll have no problem abiding by these rules and regulations.