How the new EU Consumer Rights Directive affects etailers and their customersby
On 13 June 2014 new EU legislation on business-to-consumer (B2C) rights came into force: The Directive on Consumer Rights. It provides consistent regulations across the EU, giving consumers a higher level of protection when purchasing on the high street, by post or online.
As a result, every retailer should evaluate its purchase process to ensure it meets the new requirements, otherwise you may find yourself out-of-pocket - e.g. a merchant could get into a situation where consumers don't have to pay certain charges and have up to a year to return purchased goods. If you comply with these latest rules, you can mitigate these more extreme consumer rights, which have been put in place to protect people against unscrupulous traders.
Longer cancellation period
The consumer has the right to cancel their order for any reason, within 14 days (used to be seven days) from the date the goods have been received. The consumer is entitled to receive a refund including the standard delivery cost. When the consumer hasn't been clearly informed about their rights to cancel their order, the cancellation return period is extended up to one year.
Merchants must issue refunds within 14 days of cancellation. However, you can wait until you have received the returned goods before issuing the refund, or until the consumer provides proof that they have sent the goods back, e.g. a proof of posting receipt.
More explicit purchase buttons
Merchants will need to use clear language for their checkout payment button which ensures the consumer knows they are about to pay for their order, such as 'Pay Now' or 'Secure Payment'. If you don't make this clear, the customer is entitled to a refund outside the standard refund period if requested.
Total costs shown upfront
Online shoppers won't have to pay for any charges which aren't clearly displayed before placing the order. You will need to declare all shipping costs, taxes and duties at the checkout, so there are no surprises.
Written order confirmation
The consumer must receive a written order confirmation by a 'durable medium', such as by email or a printed receipt by post.
No more pre-ticked opt-in boxes
Merchants can no longer pre-select tick boxes offering additional options at extra cost or signing consumers up for services they haven’t actively chosen.
Surcharges for credit card payments
Card processing fees can only be passed on to the consumer at the same cost incurred by the retailer. You can’t make a profit by passing on higher charges for processing a specific card type.
You can only charge the basic/local call rate and mustn’t operate support or enquiry numbers on a premium rate.
Standard EU cancellation form
A standard cancellation form must be provided so the customer may fill this in to cancel an order.
Digital download cancellation
The sale of digital products is affected by the new rules. You must give buyers sufficient details upfront about the compatibility of what they are purchasing and any additional software required. Any limitations on the number of copies the customer is entitled to download must be clearly stated.
The customer has the right to cancel their digital download order right up to the point the download commences, or the streaming of the data starts, but after that they aren’t entitled to a refund. The consumer must go through a clear process where they choose to initiate the download so there is no confusion as to when they are about to pass the point of no return.
What actions should online merchants be taking?
Review your current business process with the check-list of key points of compliance below:
Terms and conditions
Amend your T&Cs to declare the new cancellation and refund periods, stating the consumers’ rights to receive a refund on their order including the standard rate of shipping.
Delivery and returns
ü Provide a cancellation form.
ü Include details on the new mandatory regulations, stating that unless a delivery date has been previously agreed, the purchased goods will be delivered without unnecessary delay within thirty days from the purchase date.
Order confirmation page
ü Evaluate your online checkout's order confirmation page to ensure it clearly declares the total cost of the order including any additional charges prior to payment, such as shipping, tax and surcharge fees.
ü Change the wording on your checkout confirmation page button which takes the shopper onto the payment stage so they click a 'Pay Now' or 'Secure Payment' button instead of weaker worded 'Buy Now', 'Checkout' or 'Proceed'.
ü Require acceptance of your terms and conditions during the checkout process.
Checkout opt-in boxes unticked
Make any tick boxes in your checkout opt-in by default, so the consumer isn’t unwittingly signing up for anything.
Order confirmation paperwork
Ensure you provide electronic or printed order confirmation details for every order so the customer has a full record of everything they are agreeing to purchase.
Train your customer services and support staff so they are up-to-date with the regulation changes when dealing with order cancellations and refunds, etc.
Simon Horton is the founder of ecommerce plugin supplier ShopIntegrator.