WASHINGTON, D.C. — The Federal Trade Commission (FTC) has announced a court order requiring Los Angeles-based ecommerce marketplace GOAT to pay over $2 million in penalties for violating federal rules governing shipping practices and misrepresenting its refund policies. The ruling addresses GOAT’s failure to honor shipping commitments and adequately implement its “Buyer Protection” policy, which promised refunds for defective or inaccurate products.
According to the FTC, GOAT, operated by 1661, Inc., repeatedly breached the Mail, Internet, or Telephone Order Merchandise Rule by failing to meet advertised shipping times. The company shipped 37% of “Instant” orders later than promised and delayed over 16% of “Next Day” orders, despite customers paying significant fees for expedited shipping. The FTC further alleged that GOAT neglected to offer buyers the required option to agree to delays or cancel and receive refunds for late orders.
The FTC’s complaint also revealed widespread issues with the company’s refund practices. Although GOAT advertised a comprehensive “Buyer Protection Policy” and “Assurance of Authenticity,” many consumers were denied full monetary refunds or were only offered partial refunds and store credits for deficient products, including items deemed inauthentic or incorrect. Customers frequently faced obstacles when attempting to resolve complaints, with GOAT requiring repeated follow-ups to secure promised refunds.
FTC Bureau of Consumer Protection Director Samuel Levine underscored the importance of accountability in ecommerce, 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.”
Settlement Requirements
Under the approved settlement, GOAT will pay $2,013,527 to refund affected consumers and is prohibited from engaging in unfair shipping and refund practices highlighted in the FTC’s complaint. The order also mandates that GOAT improve its customer service operations and disclose any limitations on refund eligibility to ensure greater transparency. Specific protections include barring the company from misrepresenting return policies, denying refunds for qualified returns, and failing to provide prompt refunds for late shipments.
This enforcement action emphasizes the FTC’s ongoing efforts to ensure fair practices in online marketplaces and protecting consumers from deceptive business practices. The penalties imposed on GOAT serve as a stark reminder to all businesses regarding compliance with federal consumer protection laws.
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