The Federal Trade Commission (FTC) has announced that GOAT, a popular online marketplace for sneakers, apparel, and accessories, has been ordered to pay more than $2 million for violating federal rules on shipping practices and failing to honor consumer protections. The settlement resolves allegations that GOAT misled customers about its shipping and return policies, causing many consumers to be denied refunds or forced to jump through hoops to get proper compensation.
According to the FTC’s complaint, GOAT, operated by 1661, Inc., advertised promises such as quick shipping and “Buyer Protection” for consumers who received faulty or deficient products. However, the company failed to put systems in place to ensure these promises were honored. As a result, many customers were left without refunds or compensation, and were instead offered store credit or were forced to complain multiple times to receive any relief.
The complaint detailed several misleading practices. GOAT promoted expedited shipping options, including same-day and next-day delivery for certain orders. However, the FTC claims that 37% of “Instant” orders were shipped later than promised, and more than 16% of “Next Day” orders were delayed, despite customers paying extra for faster shipping. GOAT did not provide affected customers with the option to cancel their orders or receive a refund, which is a violation of the FTC’s Mail, Internet, or Telephone Order Merchandise Rule.
In addition to shipping issues, GOAT’s “Assurance of Authenticity” and “Buyer Protection Policy” were found to be misleading. The FTC alleges that when customers received defective or inauthentic products, they were often denied returns or refunds, and instead were given partial refunds or in-store credit. The company’s customer service practices made it difficult for consumers to escalate complaints, and many were left without resolution unless they repeatedly pushed for action.
FTC Bureau of Consumer Protection Director Samuel Levine emphasized the importance of companies fulfilling their promises to consumers, saying, “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.”
Under the terms of the settlement, GOAT will pay $2,013,527 to refund consumers impacted by the company’s illegal shipping practices. The company will also be prohibited from engaging in the deceptive practices outlined in the FTC’s complaint, including misleading customers about refunds for defective products. GOAT will be required to implement new customer service protocols to ensure that its advertised protections are properly honored moving forward.
This settlement highlights the growing scrutiny on e-commerce platforms to ensure they adhere to consumer protection laws, particularly regarding shipping, returns, and refunds.
