FTC Orders GOAT to Pay $2 Million, Alleging Shipping Violations

The Federal Trade Commission (FTC) has ordered online sneaker and apparel retailer GOAT to pay over $2 million to consumers, alleging that the company violated the agency’s rules around shipping practices.

In its complaint, the FTC alleges that GOAT did not give buyers the option of cancelling an order in cases in which the goods were shipped later than promised, rejected many return requests of goods that were not as described, made it difficult for consumers to complain, and provided full refunds only to those who escalated their return requests, the agency said in a Monday (Dec. 2) press release.

“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,” Samuel Levine, director of the FTC’s Bureau of Consumer Protection, said in the release. “Forcing customers to jump through hoops or keep complaining in order to get a promised refund is also unacceptable under the law.”

Reached by PYMNTS, a GOAT spokesperson provided an emailed statement saying that the company settled the matter with the FTC to avoid the cost and time of litigation, and that it is “confident in the products we sell and the way we sell them.”

“The FTC looked at tens of millions of our shipping records and the reviewed sample data indicated that 99.84% of products were shipped or received in time,” the statement said. “The complaints centered on customer requests were also limited, representing roughly 0.008% of sample data orders, and were the result of minor error.”

Under the proposed settlement, GOAT will be required to pay over $2 million to provide refunds to consumers, will be prohibited from the practices detailed in the complaint, and will be required to use certain customer service practices when it says it will provide special protection for certain products, according to the FTC press release.

FTC lawsuits resulted in over $324 million in refunds to consumers in 2023, according to the agency’s annual report on refunds to consumers that was released in June. That total includes money returned to consumers as a result of all FTC cases, whether the refund program was administered by the FTC, other federal agencies or the defendants.