Consumers’ statutory rights were bolstered significantly in June this year with the introduction of the much-anticipated Consumer Contracts Regulations 2013.
One of the aims of the new regulations is to offer more protection for online shoppers, a direct result of the explosion in online sales over the past decade. Retailers should know how basic rights of consumers have changed and what this means for their business.
The regulatory changes are of particular relevance to the online fashion retail industry because of the higher than normal volume of customer returns. Under the new laws, online retailers will now have to provide a minimum 14 day cooling-off period, extended from 7 days. This allows customers two weeks to change their mind and the chance to cancel any orders within that timeframe. Of course this is subject to certain exemptions, for example, if the clothes have been custom made for the buyer. Failure to inform customers of their right to cancel before buying goods online is a criminal offence and carries fines of up to £2,500.
Many online retailers go a step further than the minimum legal cooling-off period and provide a returns policy that is more attractive to customers than those perhaps offered by competitors. For example, it is common for retailers to allow customer returns for up to 21 days after buying the product. One leading highstreet and online retailer goes as far as offering a generous 35 day cooling-off period.
Online retailers that go above and beyond the statutory cooling off period still need to be careful that they are not falling short of the new regulations in other areas. This includes:
- Refunds: Where customers cancel a contract, the retailer must provide a refund within 14 days of receiving the goods back from the customer. The previous laws allowed up to 30 days for the retailer to provide a refund.
- Order buttons: Any button on a website that a customer has to click to activate their payment must be clearly labelled in unambiguous wording. Buttons that are labelled “place order” are not allowed, and should preferably be labelled “buy now” or “pay now”.
- Pre-ticked boxes: Customers must expressly agree to make any additional payment on top of their original order. “Pre-ticked” boxes for additional payments are now banned.
- Fashion retailers unsure of whether their online business model is compliant with the new regulations should carry out a full audit of their T&Cs and online sales procedures. This is to reduce the risk of regulatory enforcement by local trading standards or the Competition and Markets Authority (CMA), which could result in costly fines.
For more information please contact Duncan Reed, on 0117 917 7528 / Duncan.Reed@TLTsolicitors.com