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As a business owner, you must understand the law that applies to your business, such as consumer law dealing with consumer rights. This applies to eCommerce businesses, too, and some areas of consumer law are specifically relevant to online businesses as you are distance selling. One significant piece of law you should be aware of is the Consumer Contract Regulations. You must abide by this law, such as by giving your customers certain information, and there are repercussions for not doing so, such as extending your online customers’ cancellation rights for up to one year. This article will explain what you, as a UK eCommerce business, need to know about the Consumer Contracts Regulations.
What Are the Consumer Contracts Regulations?
The Consumer Contract (Information, Cancellations and Additional Charges) Regulations 2013 is a piece of UK legislation that protects consumers and gives them rights. Therefore, it protects your online customers. The Consumer Contracts Regulations also require you, as an online business owner, to ensure your eCommerce customers have specific information from you. There are many things you need to know about this UK law, and below, we point out some essential information about this.
Fundamentals of the Consumer Contracts Regulations
1) When Do the Regulations Apply?
Arguably, the first thing you, as an eCommerce business, need to know about the Consumer Contracts Regulations is when they apply to contracts between you and your customers. The Regulations apply to contracts that start anytime from 13 June 2014. This is because they came into force on that day. Therefore, the Regulations do not apply to any contracts you and your online customers had in place before this date. Instead, the Distance Selling Regulations apply to these contracts.
2) Right to Cancel
A key thing to understand about the Consumer Contracts Regulations is that they give your eCommerce customers the right to cancel their purchase with you. This means your online customers can cancel the goods or services you provide them with. The cancellation period begins as soon as your online customer either makes their order with your eCommerce brand or starts a contract for your services. The right-to-cancel period then lasts for a further:
- 14 days from the day your product reaches your online customer; or
- 14 days from the day your eCommerce customer enters into the contract for services with you.
When your eCommerce customer cancels the service or product you provide them with, you have to give them a refund, as this is their legal right. This should include a refund for the cost of delivery, although this only has to be the cost of a basic delivery rather than a special delivery. There are several rules about refunding your customer, such as:
- if you decide to collect the return from your online customer, they do not have to wait for you to do so before getting a refund, and
- that you might be able to deduct some of the total refund if your eCommerce customer handled the goods more than they needed to.
You also need to know that the Regulations do not apply to:
- CDs, DVDs or any software where your customer has broken the wrapping seal;
- perishable products;
- products that were tailor-made or personalised; and
- products where they have broken a health or hygiene seal.
3) Digital Content and the Right to Cancel
It is essential that, as an online business, you know that if you provide your customer with digital content, the right to cancel changes slightly. Whilst your eCommerce customer still initially has the right to cancel, they may choose to waive this right. This means that they decide they no longer want it. This applies when they have chosen to download the digital content before the 14-day right-to-return period is over.
4) Prohibition on Charging Customers in Certain Instances
Another essential point you need to know about the Consumer Contracts Regulations is that they prevent you from charging your online customers for particular products or services. For example, you cannot charge your eCommerce customers for:
- any product or service you have listed in their online basket; and
- any product or service they buy because there was a pre-ticked box which made them buy it.
5) Providing Information to Your Customers
As an online business, the Consumer Contracts Regulations say that you must provide your eCommerce customers with specific information. This applies to companies that enter into contracts over the phone, too. You should provide this either verbally or through written or electronic communications such as by paper or email. There are eight critical pieces of information you need to deliver, which include, for example:
- a description of what you are selling, which should include the length of any commitment for your online customer;
- the total price of what you sell them or how you will determine this if the calculation is not complete; and
- how your customer should pay for your goods or services.
This checklist will help you identify areas in your business that may need further protection or assistance to ensure you are legally compliant.
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As an eCommerce business, the Consumer Contracts Regulations apply to your online business. You must adhere to them when carrying out sales with your online customers. This article has given you the information you need to know about the Regulations. It has explained that the Consumer Contracts Regulations give your online customers the right to cancel their purchase from you and that you need to provide them with a refund. The article also explains, for example, what you can charge your customers for. Another point mentioned is that as an online business, you need to give your customers specific information about their potential purchase.
If you run an eCommerce business and are unsure how the Regulations impact your business, contact our experienced eCommerce lawyers as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 0808 196 8584 or visit our membership page.
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