The U.S. Federal Trade Commission (FTC) has ordered Goat, an online marketplace for sneakers and apparel, to pay more than $2 million to consumers over illegal shipping practices. The FTC also alleges that Goat fails to honor its “Buyer Protection” policies.
In a complaint, the agency outlined that Goat has failed to ship many orders on time, despite charging customers extra fees after promising to ship by a specific date.
Although Goat offers priority shipping for “Instant” orders, the FTC found that it shipped 37% of all of these orders later than it promised. Plus, it shipped more than 16% of all “Next Day” orders on the second day or later after the order. The FTC alleges that Goat failed to ship orders on time, even after customers paid between $14.50 to $25 in shipping upgrade charges.
The FTC says Goat failed to meet its Mail, Internet, or Telephone Order Merchandise Rule that requires companies to give buyers the option to agree to a delay or cancel an order and get a refund in these sorts of cases.
As for the company’s “Buyer Protection” offering, the FTC notes that Goat made it seem that customers would be given full refunds if they received deficient products. Instead, the agency found that the company rejected many of these return requests, and in cases where it did grant a refund, it mostly only did so partially or with in-store credits.
In addition, Goat’s customer service practices were designed only to give full refunds to customers who continued to complain about their order, the FTC says.
“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,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection, in a press release. “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 proposed court order requires Goat to pay $2,013,527 to provide refunds to buyers harmed by its illegal shipping practices. Goat will also be required to stop the deceptive shipping practices going forward.
