The internet has changed the way consumers buy goods and services. The rise in popularity of online shopping days such as Black Friday and Cyber Monday in Ireland has shown just how true this is. Last year it was estimated that Irish consumers would spend €98 million between the two days*.
As a result, businesses have the opportunity to widen their reach with online shopfronts and capitalise on online shopping events.
However, while taking advantage of the opportunities offered by selling online, businesses should be aware of their obligations under consumer protection law.
If you sell online, you should be aware of the Consumer Rights Directive (CRD), which sets out consumers’ rights when shopping on the internet.
This is in addition to rights consumers have under the Sale of Goods legislation when buying online. For example, if what they bought is not fit for purpose or not as it was described on your website, consumers are still protected by Sale of Goods legislation.
The CRD came into force in June 2014 and introduced a number of important changes to consumer law. It provides consumers with increased protection in distance selling (e.g. online) and off-premises (e.g. doorstep sales) contracts.
The CRD strengthened consumer protection law, meaning consumers buying online can now rely on the same, and in some respects stronger, rights as those who shop in a store.
Cancellation or ‘cooling-off’ period
Under the CRD, consumers have the right to cancel an online order within 14 days of receiving the goods, or within 14 days of completing a contract in the case of a service, e.g. when the consumer makes the payment or provides their details for the payment to be made.
The cooling-off period does not apply to all goods, some of the exclusions are:
A full list of exclusions and further details about when the cooling-off period applies is available in our guide to the CRD for businesses.
You must make a sample cancellation form available to consumers. You don’t have to send a hard copy with each delivery, but you must make the form available to consumers online.
Your website must provide consumers with details of the cooling-off period. All information relating to the cancellation process should be presented in plain and intelligible language, including the relevant cancellation form, before the consumer places an order or enters into a contract.
If you do not inform the consumer of their right to cancel, the cooling-off period will be extended to 12 months from the date on which it would have expired. However, once you provide the consumer with information on the right to cancel, they then have 14 days from the date they receive this information to exercise their right to cancel.
For example, a consumer enters into a contract with you online and you do not provide them with information on the cooling-off period. If, a month later, you inform them of their right to cancel, they then have 14 days to cancel the contract from the date you give them this information. If you do not inform them of the cooling-off period at all, they have 12 months from the date they entered into the contract to cancel.
If you sell digital content online, such as music, video or software, you must inform consumers about:
If a consumer wants to access the content - begin streaming or downloading - during the 14-day cooling-off period, you must get their express consent to the download or the streaming and you must let them know that they will lose their cancellation rights.
Previously, if a consumer cancelled an order, the online business had to refund the consumer within 30 days. Since June 2014 the period is 14 days from the day the consumer cancels. The only reason a refund can be delayed is if you are waiting to receive returned goods or for the consumer to provide proof of postage of the return. Once either of these have been received, the consumer must be refunded all costs including the original delivery cost – to the value of what the standard delivery cost would have been.
Ban on hidden fees and charges
You must make the total cost of the product or service clear, including any additional fees (e.g. taxes or delivery costs), before the order is confirmed. If you do not inform consumers of costs in advance, they do not have to pay these charges.
Clearer information on the cost of returns
If a consumer uses the 14-day cooling-off period they will have to pay for the cost of returning the goods, as long as you inform them of this before they conclude the contract. If you do not inform them of this, you will have to cover the cost of returning the item.
Ban on pre-ticked boxes
You cannot take additional payments without the consumer’s express consent. Under the CRD, businesses are prohibited from using pre-ticked boxes during the ordering process, as this may cause some consumers to pay for extras they don’t need by accident. Consumers must actively choose to opt in to any extra costs (such as insurance or car hire).
Ban on surcharges
You cannot impose credit or debit card charges which exceed the actual cost you bear for offering this method of payment. If you operate a hotline for customer care or after-sales services, you cannot charge more than the basic rate for calls.
You need to make it clear when a consumer will be charged for something. If placing an order online includes clicking a button, or something similar, you must make it very clear to the consumer that placing that order means they will have to pay. For example, the button should be labelled ‘Pay Now’. If you do not make this clear, the consumer is not bound by the order or contract.
The CRD does not apply in all cases, some of the exclusions are:
There is a full list of exclusions in our CRD guide.
Check your marketing and ordering processes to make sure you are in line with the CRD. All the information you provide to consumers should be clear, understandable, accurate and timely.
*Source: Visa Europe