Editor’s Note: The Distance Selling Regulations are being replaced by the Consumer Rights Directive.
The UK implemented this change on the 13 December 2013 and online sellers will have 6 months to ensure that they comply with this new legislation.
We explain more about the Customer Rights Directive in a separate article.
In the UK, the Consumer Protection (Distance Selling) Regulations address the problem posed to consumers when buying online: how can they be sure that the product they ordered is what they actually want because they cannot physically inspect the product until it arrives.
Trading Standards’ online portal, the ‘Distance Selling Hub‘ has detailed information on what rights DSR gives to consumers and what obligations are for traders.
For your convenience I have summarised the key points below.
What are the Distance Selling Regulations?
Distance Selling Regulations (DSRs) provide consumers with rights and protection when they purchase goods or services online. In particular the DSR gives consumers the right to:
- The identity and contact details of the trader from whom they are buying a product/service,
- Accurate and clear information about the product/services that they have ordered,
- Confirmation of the consumers right to cancel the order for a product or service
- A ‘cooling off period’ – currently set at 7 working days from the day after delivery – this gives the consumer time to physically inspect a product or decide whether they wish to proceed with a service
- Unconditional right to cancel an order for the product(s) or service(s) within this cooling off period
- To receive a full refund within 3o days, including delivery charges, when they have cancelled an order for goods or services.
With a few exceptions, all online traders who sell products or services to consumers must comply with the Distance Selling Regulations.
What must I do to comply to with the Distance Selling Regulations?
DSR requires all traders to provide information about their business to consumers both before they purchase (pre-contract) and after the order has been placed.
Information provide pre-contract can be in a form that is appropriate to the transaction, for example be on a website or given verbally over the phone.
However once the contract has been formed, certain information must be given to the consumer in writing or, in what the DSR calls, a ‘durable medium‘. While durable medium is not expressly defined in the DSR, it should be a format that can be retained by the consumer and not able to be edited. A paper document or an email are two examples of durable medium. Note that a URL back to your website is not sufficient, as this can be edited later.
Below, I have summarised the key information that the DSR has specified that must be provided to a consumer, along with recommendations as to where it should be presented on a website or during delivery:
Information you must provide about your business
Before a consumer purchases from you, you need to ensure that the consumer has access to sufficient detail so that they can identify the business that they are looking to purchase from, including:
- Trading Name
- Postal address
- Full geographic address: if payment is required in advance of delivery. If you are trading from home, this does mean that you must provide your home address.
Information in your Terms & Conditions
Many of the following points should already be part of your standard T&Cs. However it does make it easy for your customers and help them to choose to buy from your business if this information is also in your FAQs and Information pages.
- Delivery arrangements: delivery options, delivery charges and expected despatch and delivery date. And the delivery of the product, or service MUST be within 30 days, unless the both you and your customer agree to a different period.
- Payment arrangements: what methods of payment are applicable and when payment will be taken.
- Cancellation and returns policy: There must be a clear statement that the consumer has a right to cancel the order for the product(s) or service(s).
- Communication of cancellation: if a customer has to call a premium-rate phone number in order to cancel, then you must advise the cost of the call per minute, and also the likely cost of the entire call. All costs must be given inclusive of VAT and also a further note, if the cost of call may differ by network provider.
- Product Substitution: if you intend to supply substitute goods. Note that you will have to bear the cost of the consumer returning these goods
- Minimum length of contract, if products or services are to be supplied recurrently on a on-going or open-ended basis.
Information about your Products
Your website should always provide an accurate description of your products or services as the more accurately that they are described, the less likely that the customer will request a return and/or refund.
Other information required is:
- Price: Including how for long the price is valid.
- Relevant taxes
- Delivery Charges
Some products are excluded from the Distance Selling Regulations, for example: unsealed computer software, CDs or DVDs, personalised or made-to-order items, perishable items, or goods by their nature that can’t be returned.
Information after the customer places an order?
Typically, a contract is formed when the customer agrees to your T&Cs and places an order.
Sometime after this point and ‘in good time’ the online trader must confirm certain information back to the consumer and formally advise of their right to cancel the order. This information must be provided in writing or in a durable medium, and should be provided by the time that the customer receives delivery of their product.
It is important to note that the start of the cooling off period starts when the customer receives the goods and when they receive the information. If there is a delay in providing the information, then cooling off period will start the day after they receive the information.
To be compliant with DSR, following must be provided in writing or in another durable medium:
- Trader identity: enough information for the consumer to identify from where they have purchased
- Description of the goods or services that are being provided, including taxes
- Delivery arrangements and any delivery charges (if applicable) or how the service will be performed
- Details of how payment can be and/or have been made
- Information about the customer’s right to cancel
- Returns Policy: how and whether you want the goods returned, and if so who will pay the cost of return.
- Services only: consequences of agreeing to a service starting before the end of the 7 working day cancellation period.
- Details of any guarantees or after sales services
- Geographic address for a customer to send any complaints.
- Contract termination policy: for contracts lasting more than 1 year.
This information could be included in your Order Confirmation email or included in the despatch documentation packed with the order.
What do I have to refund, when the customer cancels an order?
You must refund the customer in full for the amount paid for the products that have been cancelled and the standard delivery charges. An administration fee or a re-stocking charge cannot be deducted from this refund amount.
Note that the DSR does not require the customer to return the goods to you, only that they make them available for collection. Further, it is will be your responsibility and cost to arrange collection of the cancelled goods from the customer, or to refund the customer the costs of them doing.
Therefore, the returns policy must be supplied in the written information provided to the customer and within your T&Cs, as well as should be stated clearly on your website. This includes specifying that the customer will have to pay the return carriage cost. If this is not specified as part of the contract with the customer, then the trader will have no rights to charge for a return.
If the product is faulty, then the cost of return carriage is always refundable.
This sounds onerous to my business. What are my rights ? Are there any consumer obligations?
Consumers must only take reasonable care of the goods if they decide to cancel the contract.
If they wish to cancel, then they must do so within 7 working days from the day after they receive the goods. Cancellation must be in writing, unless the written information says otherwise.
Some aspects of the DSR can be documented within your T&Cs and/or the written information. However the right to cancel a contract for goods within the cooling-off period is unconditional and cannot be shortened.
Where can I find more information on the Distance Selling Regulations?
- Simple guide from the Office of Fair Trading
- Trading Standards’ online portal, the ‘Distance Selling Hub‘
- The regulation in detail.
I hear that the Distance Selling Regulations are being replaced by the Consumer Rights Directive. What does this mean for me?
The Consumer Rights Directive (CRD) is an EU regulation that was passed in October 2011 and must be implemented by EU member states. The UK implemented this change on the 13 December 2013 and online sellers will have 6 months to ensure that they comply with this new legislation.
We explain more about the Customer Rights Directive in a separate article.
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