Happy Monday! 🙂
Yes, we’ll start the week with rather complex and serious topic – Consumer Contracts Regulations BUT I’m here to make it easy for you to understand so you don’t have to read hundreds of pages of mumbo-jumbo legal documents!
I’m honestly quite shocked by the number of businesses selling online that seem to be completely unaware of their legal responsibilities, with very little understanding of the Consumer Contracts Regulations and what they need to do under UK law, as an online seller.
A number of years ago I wrote a long article on this topic, after I was dismayed to get an email from a blog reader of mine describing how they had been refused a refund by Babz Media for a faulty item, with the eBay powerseller (with a feedback score close to 5 million!) apparently being completely unaware of UK law.
Basically a few months after purchase, an item bought from them developed a fault but when Babz were contacted for a return they repeatedly refused to cover the return postage cost as the “order was placed more than 30 days ago”. Even after it was pointed out to them that they were legally required to pay for postage of a faulty good, they claimed that “Under the distance selling regulations, if it is stated in the terms and conditions of the seller, if more than 30 days old, the customer is responsible for return postage costs.”
Now of course that’s a load of nonsense and they were completely wrong. As stated in the Sale of Goods Act 1979 (section 48b, part 2 if anyone would like to check for themselves):
(2) If the buyer requires the seller to repair or replace the goods, the seller must—
(a) repair or, as the case may be, replace the goods within a reasonable time but without causing significant inconvenience to the buyer;
(b) bear any necessary costs incurred in doing so (including in particular the cost of any labour, materials or postage)
And there you go – as clear as can be, yet still a huge company like Babz Media refused to pay for the return postage (on an interesting side note – Babz Media actually ceased trading unexpectedly in 2015!).
But you’ll notice that I quoted the Sale of Goods Act above and that Babz Media referred to the Distance Selling Regulations.
However, both of these directives have since been replaced.
On June 14th 2014, the Distance Selling Regulations were superseded by the Consumer Contracts Regulations and from October 1st 2015, the Sale of Goods Act has been replaced by the Consumer Rights Act.
The Consumer Rights Act applies to purchases made both in-store and online (all purchases, basically) and the Consumer Contracts Regulations provides extra protection for consumers making purchases off-premises, or at a distance (this includes purchases made online, over the phone, or by mail order).
So let’s now go through the Consumer Contracts Regulations (CCR) and make sure you’re fully aware of the rules you need to follow when selling online, be that on eBay, Amazon, or your own eCommerce store.
Now the CCRs cover a few different main areas/points and your legal responsibilities actually start BEFORE you make a sale as under the regulations you need to provide certain information about your business and the goods/services on offer to any potential buyer, and this includes:
- Information about the seller (this must include the full name of your business, a geographical address and working contact number, as well as a contact email address).
- An accurate description of the goods or services you are offering.
- The total price of the goods or services you are offering, including all applicable taxes.
- Details on any delivery costs.
- Details on how payment can be made.
- Details on the arrangement for delivery of service/goods – i.e. when a consumer can expect the item to arrive or the service to start.
- Details on the cancellation rights of your buyer and the time limit for exercising that right.
- Details on the cost of returning an item, both in the instance that it’s faulty (you, the seller, will cover the cost of return) and in the instance that the buyer has changed their mind (the buyer is then responsible for covering the cost of return).
Now this is all very self-explanatory and straightforward and when you’re selling on eBay or Amazon, it’s all pretty much taken care of for you anyway as you have to provide this information within your listing.
There is one point I want to quickly talk about in more detail – about the information you have to provide as a seller.
I get a lot of emails from new sellers who are hesitant about putting their address under the seller information tab on eBay but you have to – that’s the law. If you are operating as a business, then you need to provide this information (it doesn’t matter if you’re only a sole trader, that’s still classified as a business) – so please make sure you comply.
Now there are some more rules on the information you need to provide for distance and off-premises sales, but they don’t apply to everyone and are a bit technical, so I’ll just put a link to the legislation for those that want to take a look: Consumer Contracts Regulations Schedule 2
But let’s move on to what is the most important and most often discussed part of selling online:
The Right to Cancel
Under the Consumer Contract Regulations, consumers have an unconditional right to cancel an order for whatever reason, provided they do so within 14 days of receiving their goods (this was previously 7 days under the DSRs).
And just to be clear, that’s 14 calendar days from when the goods are received, not from when the order is made or from when the item is dispatched (as some online sellers seem to believe!).
This is the statutory cancellation period (also known as the “cooling-off period”) and it’s the minimum you can offer as an online seller. Of course you can offer more, like 28 days (or 365 days – if you want to follow Schuh’s example!).
- Once a buyer has informed you that they want to cancel a contract and return an order, they should do so within 14 days.
- You should refund the original purchase price within 14 days of receiving the goods back.
These are actually two important points that help a lot when dealing with returns on eBay and Amazon, as under the previous Distance Selling Regulations, you were required to provide a refund BEFORE the buyer had to post the order back – which created a lot of problems with unscrupulous buyers never bothering to actually return the item that they received a refund for.
Thankfully now you only have to provide a refund once you’ve received the item back and have inspected it.
And speaking of inspecting the item, the good news continues, as:
“You have the right to deduct a certain amount from refunds where goods show signs of unreasonable use that has led to diminished value”
Now before you get all excited, let me clarify this, as I see a lot of confusion online about this point:
- You CANNOT deduct from the refund because the item was removed from its packaging.
- You CANNOT deduct from the refund because the item has been tried or checked.
Customers can handle the goods as much as they would in a regular retail store and you can only deduct if the item has been obviously and definitely used extensively.
So if you just follow this rule using your common sense, it’s easy to decide whether a deduction can legally be made or not. For example, it’s reasonable to try on some shoes, but that means walking around in them for a few minutes, not running a four hour marathon and then deciding you want to return them… because that wouldn’t be allowed in a retail store either!
Now really you have to deal with this on a case by case basis, but I honestly just recommend refunding in full in most cases (unless the buyer is really trying to fleece you of course) as while you may save yourself a little bit of money, you’ll have to deal with a lot of hassle and negative feedback (we all know how difficult eBay and Amazon buyers can be!).
And last but not least, there is one more rule in regards to the cancellation right for you to bear in mind (and shockingly, it’s again in favour of us sellers):
You only have to refund the basic outbound delivery rate.
As before, you still need to refund the original delivery cost, but now only up to the cheapest standard delivery you offer. So what this means is that if a buyer chooses to upgrade to a more expensive delivery option and then they decide to return the goods, you DON’T have to refund the full amount.
Let’s say, for example, that you’re selling a product for £8 with a £3.80 shipping cost (which is via RM 2nd Class). If you also offer 1st Class Delivery for £5.45 and your customer decides to pay extra for that but then wants to refund the order – you only have to refund £11.80 (i.e. £8 plus the standard shipping cost of £3.80).
There are also some goods that can’t be returned simply because the buyer has changed their mind, such as:
- Perishable goods or any item that deteriorates rapidly, such as food or fresh flowers;
- CDs, DVDs or other software where the seal on the wrapping has been broken;
- Custom-made or personalised goods;
- Underwear, earrings etc.
Who Pays for the Return of Goods?
This is probably the question I’m asked most often and the one that causes the most confusion, but again, the rules are very simple:
If a buyer has changed their mind and cancelled an order within the “cooling off” period, then they have to cover return postage as long as you stipulated this before the purchase.
So for a buyer to be responsible for the return postage cost, you have to have made that information clear beforehand – i.e. in the returns section of your eBay/Amazon listing.
However, if the goods are faulty (not as described, defective, damaged etc. – basically not fit for purpose in any way) then you must refund the purchase price in full and pay for return delivery.
Which is something good old Babz Media weren’t aware of.
And that actually brings me perfectly on to my conclusion for this post. A few years ago, when I wrote the Distance Selling Regulations post, I ended it by saying that while these are the minimum that you have to offer, I always suggest “offering the best service possible to buyers so they come back to you for more (even if your prices are a little higher than the competition)… as that’s the smart way to sell; you get higher margins, more repeat customers and more sales – leave those other businesses to fight with their customers over a couple of pounds for return postage!”
And I stand by that 100% – and I think Babz Media and what happened to them is a perfect example and really does illustrate my point.
So that just about brings us to the end of this post, as I’ve covered the most important and confusing points of the consumer contracts regulations.
Of course the actual Consumer Contracts Regulations is much more extensive and covers some other aspects of selling online (mainly in regards to specific rules for those selling digitally downloaded products) so if you want to read over them in full, please take a look at this document here.
I hope you’ve found this post useful and that it helps you stay fully compliant with the online selling laws!
As always, if there’s anything that’s unclear or if you’d like my help or advice on anything, then please don’t hesitate to post in the comments section below and I’ll do my best to help.
Otherwise, until next time!
All the best,