Home Shopping Network 2012 Annual Report Download - page 10

Table of Contents
Order Entry, Fulfillment and Customer Service
HSNi provides customers with convenient options in connection with the purchase, payment and shipment of merchandise, some of which
vary by brand, business or product. Merchandise may be purchased online, through mobile devices or ordered using toll free phone numbers
through live sales and service agents. HSN also offers the convenience of an automated attendant system and, in limited markets, remote control
ordering capabilities through pay television set-top boxes. Cornerstone’s catalog orders can also be made via traditional catalog sales order form
submissions.
In addition to traditional payment options, such as credit and certain debit cards, payment options include private label credit cards, Paypal
and, in the case of HSN, Flexpay. By utilizing Flexpay, customers may pay for select merchandise in two to six interest-free, monthly credit or
debit card payments. HSN also offers its customers the convenience of ordering products under its Autoship program, pursuant to which
customers may arrange to have products automatically shipped and billed at scheduled intervals. Standard and express shipping options are
available and customers may generally return most merchandise for a full refund or exchange in accordance with applicable return policies
(which vary by brand and business). Returns generally must be received within specified time periods after purchase, ranging from a minimum
of thirty days to a maximum of one year, depending upon the applicable policy.
HSNi seeks to fulfill customer orders and process returns quickly and accurately from a network of fulfillment centers. For HSN, these
centers are located in Tennessee, California, Virginia and New York, and for Cornerstone, the fulfillment centers are located in Ohio, Arizona
and Washington. HSNi contracts with several third party carriers and other fulfillment partners to ensure the reliable and timely delivery of
products to its customers and processing of returns.
Through HSN.com and the various websites operated by Cornerstone or through HSNi’s common carriers, customers can also generally
track the status of their orders, confirm information regarding shipping and, in some cases, confirm the availability of inventory and establish
and manage personal accounts. Customers may communicate directly with customer service via e-mail or by telephone with call center
representatives available seven days a week.
Government Regulation
We market and offer a broad range of merchandise through television, online, catalogs and other channels. The manner in which we
promote and sell merchandise, including claims and representations made in connection with these efforts, is regulated by a wide variety of
federal, state and local laws, regulations, rules, policies and procedures. Some examples of these that affect the manner in which we sell and
promote merchandise or otherwise operate our businesses include, but are not limited to, the following:
These laws, regulations, rules, policies and procedures are subject to change at any time. Unfavorable changes applicable to us could
decrease demand for merchandise offered by us, increase costs which we may not be able to offset, subject us to additional liabilities and/or
otherwise adversely affect our businesses.
Since October 1996, HSN has been subject to a consent order issued by the Federal Trade Commission, or FTC, which terminates on the
later of April 15, 2019, or 20 years from the most recent date that the United States or the FTC files a complaint in federal court alleging any
violation thereunder. Pursuant to this consent order, we are prohibited from making claims for specified categories of products, including claims
that a given product can cure, treat or prevent any disease or have an effect on the structure or function of the human body, unless we have
competent and reliable scientific evidence to substantiate such claims. Violation of this consent order may result in the imposition of significant
civil penalties for non-
compliance and related redress to consumers and/or the issuance of an injunction enjoining us from engaging in prohibited
activities. The FTC may periodically investigate our business and operations on an ongoing basis for purposes of determining our compliance
with the consent order.
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• The Federal Trade Commission’s regulations related to the sale of products and/or commercial contacts with our customers or potential
customers, such as the Telemarketing Sales Rule and Do Not Call;
• The Food and Drug Administration’s regulations regarding marketing claims that can be made about cosmetic beauty products and
over-the-counter drugs, which include products for treating acne or medical products, and claims that can be made about food products;
• Regulations related to product safety issues and product recalls including, but not limited to, the Consumer Product Safety Act, the
Consumer Product Safety Improvement Act of 2008, the Federal Hazardous Substance Act, the Flammable Fabrics Act and regulations
promulgated pursuant to these acts; and
• Various state laws, regulations and interpretations regarding the obligations of retailers with respect to the collection of sales tax on
internet sales.