FTC Fines Goat $2M Over Misleading Shipping Claims and Buyer Protection Failures
The U.S. Federal Trade Commission (FTC) has ordered sneaker marketplace Goat to pay $2 million in consumer restitution following an investigation into deceptive shipping practices and failure to honor refund policies.
Key Findings from the FTC Investigation
1. Shipping Timeline Violations
- 37% of “Instant” orders shipped late despite premium fees (\(14.50-\)25)
- 16% of “Next Day” orders arrived 2+ days after purchase
- Failed to provide delay notifications or cancellation options as required by the Mail Order Rule
2. Buyer Protection Policy Failures
- Advertised “full refunds” for defective products but:
- Frequently denied return requests
- Issued partial refunds or store credits instead of cash
- Required excessive customer complaints to process full refunds
FTC’s Official Stance
“When an online business promises to protect consumers’ purchases, it must have the appropriate systems in place,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “Forcing consumers to jump through hoops for promised refunds violates consumer protection laws.”
Settlement Terms
- $2,013,527 in consumer restitution
- Mandated cessation of all deceptive shipping practices
- Requirement to clearly disclose refund policies
Why This Matters for E-Commerce
This case sets an important precedent for:
- Transparency in shipping timelines
- Accountability for premium service claims
- Consumer rights in online marketplaces
The full complaint details additional violations of FTC regulations regarding mail order merchandise.
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