WARNING: Distance Selling Regulations on eBay!

IMPORTANT UPDATE!!!

There are new regulations in place now. Please check this article for latest information:

Consumer Contracts Regulations – Your Legal Responsibilities as an Online Seller!

Really I’m shocked that there is any need for me to write this article at all, as anyone who sells on eBay should be completely aware of Distance Selling Regulations (DSRs) and should know exactly what they have to do to follow UK law as an online seller.

But unfortunately that’s just not the case; I see hundreds of eBay listings with return rules that contravene DSRs, I get countless questions from newbie sellers about it (that’s understandable as they’re just starting out), and, most shockingly, I’ve seen some huge companies on eBay that just plainly ignore DSRs and their legal responsibilities.

And these aren’t average one-man band, sole traders either, no – I’m talking about some of the biggest sellers on eBay, with millions in total feedback!

So once and for all, I will comprehensively cover everything you need to know about DSRs and how they affect you as an eBay seller.

Okay, so let’s get started!

DSRs, or Distance Selling Regulations, apply whenever an order is made when the consumer is unable to physically touch and feel the product(s) they are buying. This includes purchases made online, over the phone, or by mail order.

DSRs don’t apply to auction-style format listings on eBay, only Buy it now listings and Second Chance Offers.

DSRs also do not apply to private sellers. There seems to be come confusion about this but there shouldn’t be as the law is completely clear – if you are a private seller (i.e. you are not acting for business purposes for either yourself or on behalf of someone else) then you do not have to comply with DSRs.

However please don’t think this means you can simply sell on eBay as a private seller if you’re a sole trader, as you obviously can’t do that. The Unfair Commercial Practices Directive makes it an offence for any business in the UK to falsely represent itself as a private individual. So if you are a business and don’t register as one on eBay (thereby misrepresenting yourself to buyers) you are in fact breaking the law, so just don’t do it!

As I’ve said many times, you should always register as a business on eBay anyway as you get access to some much-needed features, most importantly the use of Good ‘Til Cancelled listings.

Basically you should register as a business on eBay if you:

• Sell items that you have bought to resell;
• Make items yourself and sell them, intending to make a profit;
• Are a Trading Assistant;
• Buy items for your business.

Okay so now we’ve covered when and to whom DSRs apply, let’s go over what they actually are.

Your responsibilities as an online seller actually start before you make a sale as under DSRs you have to provide information about your business and the goods/services on offer to any potential buyer, and this information 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 price of the goods or services you are offering, including all included and 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.

Now as you should already be aware, this is all covered in an eBay listing so you shouldn’t have anything to worry about here.

The Right to Cancel

Under DSRs, consumers have an unconditional right to cancel an order for whatever reason, and this cancellation right starts from the moment they place the order till 7 working days after they’ve received it.

Just to be clear, that’s 7 working days after the goods have been delivered, not from when the order was placed as some eBay sellers seem to think!

And remember, 7 days is the minimum cancellation period, but you can of course offer longer such as 14 days (popular on eBay), 30 days or whatever else you want!

So if a consumer uses their right to cancel under DSRs, you must refund them total price paid, including any delivery charges. You cannot charge a restocking fee or administration fee either.

There are some goods that can’t be returned simply because the customer 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 listing.

However, if the goods are faulty (not as described, defective etc.) then you must refund the purchase price in full and pay for return delivery.

“In Order to Receive a Refund, You Must…”

Judging by the Returns information I read on countless eBay listings, this will come as a shock to many people, but you cannot insist that goods are returned as new or in their original packaging. Under DSRs consumers have the right to examine goods fully and this may involve opening the packaging and trying out the goods.

And again, going against many eBay sellers out there, you cannot say “goods must be returned within 5 days for a refund” – this is a breach of DSRs.

And lastly, once you’ve been informed of a cancellation then you have to issue a refund as soon as reasonably possible, and cannot insist on goods being received before a refund is issued.

These last three points are things that I think the majority of eBay sellers overlook so it’s a great way to set yourself apart from the crowd and turn a bad experience (having to return an order) into a great customer service experience for your customers.

Now, there’s one final point I’d like to cover, and this is actually the reason I decided to write this article – how the Sale of Goods Act (1979) also covers ALL purchases made in the UK, including online sales (in conjunction with DSRs).

I was recently contacted by a member of my Easy Auction Business video course who was asking me about DSRs based on his own personal experience shopping with Babz Media, one of the largest sellers on eBay with a feedback score of over 3.5 million.

Basically a few months after purchase, an item bought from them developed a fault but when Babz were contacted for a return, they appeared to be completely unaware of their legal obligations.

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.”

So were they right? After all that’s not something we covered above – what happens if it’s out of the 7 day cancellation period but the item is faulty?

Well the answer is – 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)

So there you have it… but still a company as huge as Babz Media refused to pay for the postage and as a result they lost a customer.

As an online seller, DSRs are something you have to follow! It’s the law and you simply have no choice in the matter, however this doesn’t seem to stop so many eBay sellers, big and small.

Anyone who’s read my blog will know I’m a big proponent of 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).

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!

Until next time,
Andrew