The Federal Trade Commission (FTC) has fined Goat, an online marketplace specializing in sneakers and apparel, over $2 million for misleading customers with false shipping promises and inadequate refund policies. The penalties address significant violations of consumer protection laws related to shipping timelines and refund guarantees.
Premium Shipping Promises Fall Short
The FTC’s investigation revealed that Goat routinely failed to meet its advertised shipping commitments. The company marketed premium shipping options for “Instant” and “Next Day” deliveries, charging customers between $14.50 and $25 in additional fees. However, the FTC found that Goat shipped 37% of its “Instant” orders later than promised and delivered 16% of “Next Day” orders two days or later after purchase.
These practices violated the FTC’s Mail, Internet, or Telephone Order Merchandise Rule, which requires companies to notify customers of delays and offer refunds or alternative arrangements.
Misleading Refund Policies
Goat’s refund policies also came under scrutiny. The FTC alleged that the company falsely suggested customers could receive full refunds for defective products under its “Buyer Protection” program. Instead, many claims were denied, and refunds often came in the form of partial reimbursements or in-store credits. The investigation further noted that Goat’s customer service practices required repeated complaints before granting full refunds, adding unnecessary obstacles for affected buyers.
FTC Bureau of Consumer Protection Director Samuel Levine criticized the company’s behavior, stating, “When an online business promises to protect consumers’ purchases, it must have the appropriate systems in place to make sure those protections can be implemented. Forcing consumers to jump through hoops or keep complaining in order to get a promised refund is also unacceptable under the law.”
The FTC’s court order mandates Goat to cease its deceptive shipping and refund practices immediately and pay $2,013,527 to compensate harmed consumers.
E-commerce thrives on convenience and customer confidence. Practices like charging extra for late shipments or forcing buyers to fight for refunds erode this foundation. While the fine may deter similar misconduct, the damage to Goat’s reputation might linger far longer.
Featured Image courtesy of Danist Soh on Unsplash
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