Distance Selling - What you need to know
Most businesses these days are selling online, and with advancing technology and more stable e-commerce platforms this seems to be the way forward. But as with any other form of selling there are rules that apply, these rules also apply when selling goods or services over the phone.
Most people know of the Distance Selling Regulations 2000, but what they don't know is that this no longer applies under UK Law. The regulations were replaced with The Consumer Contracts Regulations 2014.
How Does This Relate to My Business
The Consumer Contracts Regulations 2014 only applies to services sold to consumers not businesses. So if you're a B2B seller then you have no need to worry.
If you sell to the general public then you need to take the following into consideration:
- Information about your business:
- Your trading name
- Your trading address
- Your contact details
- A description of the goods or services, including how long any customer commitment will be.
- A price for the goods or service, or a way in which this will be calculated if it is dependant on variables.
- Cost of delivery and cost of returns or cancellations. If you do not state who will pay postage for the return then the customer has no obligation to pay.
- Details on right to cancel. You should also make available a cancellation form in order to make cancelling easier for the customer. However they are under no obligation to use this form.
- If you are providing software or digital content you also need to make available the hardware compatibility.
A customer has placed an order now what?
Once an order has been placed there are still several obligations that need to be met, these are telling the customer:
- Details of what they have purchased
- The total cost
- Arrangements for delivery
- The minimum duration of any contract and arrangements for terminating the contract,
how and when they can cancel an order and who pays for returning goods
- An address where complaints can be sent
- Any guarantees or after-sales services you offer
- Conditions for terminating contracts
- Any helpline call charges that are more than calling an 01, 02 or 03 number, or a mobile or free number
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How to Provide the Information
All information needs to be given to the customer on paper, unless they have agreed to receive it in a different format, such as email, or verbally if the contract is taken out over the phone. Failure to provide any of the information could lead to the cancellation rights being extended by up to a year.
A customer has decided to send the goods back
If a customer decides that the goods aren't what they want then they have from the moment they order the goods until 14 days after they receive them in order to notify you. They then have another 14 days on top of that in order to actually return them.
If the customer has ordered multiple items from you this 14 days starts from when they receive the last batch of their items.
Do they get a refund?
Simple answer. Yes
Longer answer. They should receive the refund within 14 days after you receive the items back, or if you have not received them then proof that they were sent, for example, a receipt from the royal mail, whichever is sooner.
A deduction from the value can be made if it is deemed the handling of the goods by the customer was more than necessary. The goods should be handled the same amount as they would have been in a shop. It's deemed acceptable for a seller to refuse a refund on the basis of the product being used. Generally, products would need to be returned unused for a refund. It's usually helpful to state this in your terms and conditions too.Should I refund the cost of delivery?
Again yes. However you only need to refund the basic cost. So, for example, if the customer paid for express or next day delivery you only have to refund the basic delivery cost.
Exemptions on returns
There are some circumstances where the Consumer Contracts Regulations won't give the customer a right to cancel.
These include, CDs, DVDs or software if the seal has been broken on the wrapping, perishable items, tailor-made or personalised items.
Also included are are goods that have been mixed inseparably with other items after delivery.
A customer wants to cancel a service
The customer has a right to cancel 14 days from entering into a service contract in which they can cancel it.
You shouldn't start providing the service before the 14 day cancellation period has ended, unless the customer has requested this, or it is written in to your Ts&Cs.
If the customer requests a service starts straight away in this instance they will still have the right to cancel, but they must pay for the value of the service that is provided up to the point it is cancelled.
For example, if they buy a service like gym membership and start using the gym and then change their mind within this 14 day time period, they will be refunded but could be charged for the amount of gym time used.
What if I provided the service in full?
The right to cancel can be lost during the cancellation period if the service is provided in full before the 14 days elapses.
There are some contracts where the customer won't have a right to cancel a service. For example, hotel bookings, flights, car hire, concerts and other event tickets, or where you are carrying out urgent repairs or maintenance.
A customer wants to cancel a digital download
The Consumer Contracts Regulations contain specific provisions for digital content.
Retailers mustn't supply digital content, such as music or software downloads, within the 14 day cancellation period, unless the consumer has given their express consent to this happening.
The consumer must also acknowledge that once the download starts they will lose their right to cancel.
If a consumer doesn't give their consent, they have to wait until the cancellation period has ended before they can download the digital content.
This is to ensure the digital content is what they want before downloading it.
The Consumer Contracts Regulations make it clear that a trader won't be able to charge a consumer for an item where it was selected for the consumer as part of that purchasing process, rather than the consumer actively choosing to add it to their basket.
For example, retailers are not allowed to charge for an extended warranty if it was added into the customer's basket as a result of a pre-ticked box.
If a company does charge a customer in this way they are entitled to a refund.
Delivery of goods
The Consumer Rights Act, which came into force on 1 October 2015, says that the retailer is responsible for the condition of the goods until the goods are received by the consumer, or by someone else they have nominated to receive them on their behalf like a neighbour.
This means that the retailer is liable for the services provided by the couriers it employs - the delivery firm is not liable.
There is a default delivery period of 30 days during which you need to deliver unless a longer period has been agreed.
If the customers delivery is later than agreed and it was essential that it was delivered on time, then the customer has the right to terminate the purchase and get a full refund.
If the delivery isn't time essential but another reasonable delivery time can't be agreed, the customer is still within their right to cancel the order for a full refund.
Returning faulty goods
If the customer has received faulty goods and wish to return them, The Consumer Contracts Regulations are in addition to their other legal rights.
So, if the goods are faulty and don't do what they're supposed to, or don't match the description given, they have the same consumer rights under the Consumer Rights Act as they have when buying in store.
Excessive call charges
The Consumer Contracts Regulations also prohibits helpline phone charges in excess of the basic rate for calls by existing customers to the retailer or trader about products purchased.
For example, if the customer is ringing to make a complaint, enquire about an order, or to cancel an order, retailers can't use premium rate numbers. They must provide a basic rate number to call.
If a customer does have to call a company on a surcharged number about goods or services they have bought, or have agreed to buy, they have the automatic legal right to claim back the surcharge from the company.
These rules do not apply to sales calls.
This is the very basics you would need to know, but all of this applies when the customer is buying goods or services at anywhere other than a shop.
This is for general guidance only and professional guidance should be sought before acting on the information presented.
The Company Wizard has no affiliation with Which? and can have no guarantee over the accuracy of the information on their website.