Taxation
THIS SECTION IS UNDER CONSTRUCTION
FTC Rules Applicable to Firms Conducting Business on the Internet
If conducting business transactions online, your business should be aware of some federal rules concerning e-commerce. The Federal Trade Commission (FTC) regulates various aspects of internet business.
The FTC’s Mail or Telephone Order Merchandise Rule applies to sales made over the internet. The Rule regulates shipment promises, unexpected delivery delays and customer refunds. To comply with the Rule, you must have a reasonable basis for promising shipment within a certain time frame. If your online advertising does not specify the shipment period, you must have a reasonable basis for believing that you can ship within 30 days. If you cannot make a shipment within the promised time period, then you must notify the customer of the delay and provide the customer with the option of cancelling the order and receiving a full refund. If you cannot fill an order, you have the right to cancel the order, but you must notify the customer of the cancellation and refund the customer in full.
Privacy
If your business allows consumers to enter personal information into your website, the FTC requires that your business have a plan to safeguard consumers’ personal information. There are no specific requirements that a business’ information security plan must follow. Adequate safeguard measures depend on various factors such as the size and nature of the business, and the amount and type of information collected on the internet. The FTC maintains a website to further assist you in making sure personal information is protected.
Spam and Email Marketing
If you decide that a website would provide less advantage than the efforts required, email could still be a beneficial alternative. Emailing a weekly, monthly or annual newsletter costs little in time or money, and avoids the hassle of printing and sending documents via the mail. Short email updates concerning revised hours of operation or seasonality may be a convenient method of communication between the direct farm business and its customers.1
All commercial email from a business to a consumer is regulated by the FTC’s CAN-SPAM Act. As a general rule, emails concerning an agreed-upon business transaction or updating the customer on that business relationship are allowed under the Act.
According to the CAN-SPAM act, a commercial email must not contain false or misleading header information or deceptive subject lines. The email must give the recipient an opt-out method if they do not wish to receive any more commercial emails from the business. The email must also be identified as an advertisement and include the sender’s valid physical postal address. Violations of the rules in this act can cost your business steep fines.
1 1 Jennifer-Claire V. Klotz, How To Direct-Market Farm Products on the Internet, 9 (2002)