Latest research on customer's rights and online retailing

Posted by Elisabeth Bell on
Whether your entire retail business operates online, or the internet is part of a multi-channel strategy, you need to ensure that you are complying with the Distance Selling Regulations (the “Regulations”) to keep customers happy.

Research published this month by eDigitalResearch, suggests that some retailers are letting their customers down when it comes to informing them of their basic consumer rights and complying with them.

The research* found that:

  • 40% of those surveyed claimed that on at least one occasion, delivery costs were not refunded when returning an item, and of these 88% were told by the retailer that delivery costs were non-refundable. The Regulations require retailers selling via any distance selling channel to refund any money paid by the consumer when the contract is cancelled. The DTi guidance** on distance selling indicates that the full price of the goods or any deposit, together with the cost of delivery, must be refunded. That is not to say that the retailer is to be out of pocket, as the customer can be charged the direct costs of returning unwanted or unsuitable goods provided that this right is clearly brought to the consumers’ attention as part of the order process.
  • 5% of those surveyed claimed to have had a return rejected in the past with 22% of those shoppers being told it was because the item was not in its original packaging. The consumer’s right to cancel a distance contract is not terminated if goods are not in their original packaging; however, the Regulations impose an obligation on the consumer to take reasonable care of goods. If this is to be a requirement of the reseller in the case of the return of unwanted goods, then this must be made clear in the pre-contract information provided to the consumer. However, there is no specific link between the right to cancel, and the retailers’ ability to resell the goods.
  • Over a quarter (27%) claimed to have encountered hidden charges when ordering products online, even though retailers are obliged to clearly identify all costs to consumers. 52% of those encountering a hidden charge claimed it was because the full delivery cost was not plainly stated when placing the order, and 37% said it was because additional costs were incurred for using a credit card which was not made clear until the end of the transaction.

This research highlights a need for retailers to be clear (for themselves and their customers) on their legal rights. Whilst the principles of the Regulations are clear, the detailed application can cause confusion. Even where retailers are complying with the strict requirements in the Regulations, customers may feel frustrated or dissatisfied if their rights are not clearly communicated, or if ‘key’ information is not provided until the conclusion of a transaction, when they may feel emotionally committed to a purchase.

To address this, we have worked with retail clients to shape their online sales processes to ensure that their statutory duties are satisfied, but doesn’t detract from the shopping experience. Complying with the law and adding value to a sale; in this competitive retail environment, that has to be a good thing.

If you would like to discuss your business’ online sales processes, please contact Elisabeth Bell.

*Source: The Retail Bulletin

**The DTI guidance

About the Author

Elisabeth is a Legal Director in our Reading office specialising in commercial contracts.

Elisabeth Bell
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0118 955 3045

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