04 Jul A field guide to ecommerce & selling online – Part 4
Staying on the right side of the law when selling online
More and more retail enterprises are launching online stores. With retail insolvencies at a five year high, it’s not surprising to see many new SMEs skipping the bricks and mortar model entirely. Even those that later go on to open physical outlets will often start trading online only.
Trading online carries with it a huge number of considerations. We have looked in some detail at the various design and usability factors which in turn dictate your stores ability to turn visitors into customers. But there is another elephant in the room that we really need to thinking about right now. Your legal obligations as an online retailer. These have recently changed and are now far more prescriptive. From the 13th of June the Consumer Contracts Regulations, which implement the Consumer Rights Directive in UK law, came into effect. These replaced the previous Distanced Selling Regulations.
Lets look at these in more detail and at some of the other important considerations.
No opt-out items at checkouts
It has been frowned upon for some time now by reputable online retailers but these new regulations now prohibit sellers from automatically adding additional goods and services to consumers shopping carts.
The right to cancel
Ok bear with me on this one as the details are nuanced.
Your customers have the right to cancel within 14 days of making a purchase. This 14 day period starts from receipt of goods if the sale is of physical goods to be delivered. In the case of services, the 14 days start immediately but the service should not commence until this period has expired. You can start services early but your customers retain their right to cancel for the full 14 days (you may charge for the service as delivered up to the point of cancellation).
Digital goods (e.g. music or software) have slightly different rules. A consumer waives their right to cancel upon starting to download any digital purchase. The seller however, has the responsibility to ensure that all details of compatibility and hardware requirements are clearly displayed. Sellers must also clearly state what DRM is used and what rights of use the buyer has.
Finally, and this is important, the new law states that you must have a standard form that consumers may use to request a cancellation. This form must make it easy for people to break contract within that 14 day period. Notice that I said “that consumers may use”. Your customers are equally within their rights to make their cancellation request through other channels such as via phone or email.
The cost of returning items
You must inform your customers as to who is responsible for return postage costs. You must also show what these costs are likely to be when they are the customers responsibility.
Sending the money back
You will be required to ensure that any money is refunded within 14 days of a cancellation request. This 14 day period begins immediately in the case of services and either, after receipt of the returned products, or proof-of-postage.
You are also required to make sure your returns policy and who is responsible for the cost of returning goods is clearly displayed during the purchase.
Total cost must be displayed
The total, including any delivery and additional charges, must be presented at the point of checkout. If it is not possible to show an exact amount, you must clearly show how the final amount will be determined.
A full description of what is being purchased
You must also ensure that you are giving a full account of all items and services that are being purchased. This includes how long any subscription commitment will be.
Order button specification
The now notorious specification for your buy button is real. The new law specifies that you must label the button that completes purchases with this snappy little phrase. Here’s the excerpt from the legislation.
Take a minute to read that again. If you fail to meet this specification your customers will not be bound by any contract. This is far more serious than trading standards having a stern word or issuing a fine. This mean that your customers will be under no contractual obligation to pay you or to return any goods or services you have supplied. Notice that it does not say the contract will be cancelled or void, so you will still be bound by its terms.
As with the EU ‘cookie’ legislation, it is hard to know how strongly this new directive will be enforced. Many online retailers are taking the “wait and see” approach. But signs are that local Trading Standard will be involved in enforcing these rules so you might want to think long and hard before deciding that this doesn’t apply to you.
Is it worth the effort?
This is not a set of guidelines or best practice. This is legislation. So you will need to comply whether you like it or not. Looking at the implications of not complying, I can’t imagine why you would take the risk. If you are still in the planning and development stages of your site, this should already be part of your specification. If your site is already live, then the cost of adding a few policies and changing a few buttons will be minimal.
On the whole, the majority of this new legislation makes a lot of sense and should only help to improve customer satisfaction.
So what are you obligated to tell your customers?
This information should be easily available to your customers when they are completing their orders.
- Who you are. Your companies legal trading name and geographic address
- A basic rate telephone number. So numbers starting 01,02,03 or 07. 08 numbers have varying cost from mobiles until new OFCOM reforms are implemented
- A full summary of what is being ordered including delivery costs and any additional costs
- Returns policy including a link to a standard form and details of any cost implications of returns
- Where the sale is of a service, a clear indication of how long the service will be delivered
- Where the sale is digital goods, full details of requirements and DRM
If your eCommerce site is already live you will want to go and review it carefully. While you are at it, you may as well review all your policy documents to ensure they meet these new rules. Pay particular attention if you are using off-the-shelf solutions, as these may not be designed with EU regulations in mind. If you are using a bespoke platform, get in touch with your developers to help implement the changes.
If you are still in the process of designing and developing your site make sure these requirements are met by your specification. And if you are unsure about any of this you are more than welcome to drop us a line.