The Distance Selling Regulations in summary

Law: Distance Selling

The Consumer Protection (Distance Selling) Regulations 2000 came into force on the 31st October 2000, since when thousands of store owners have been bound to it without really understanding what it is about. The Consumer Protection (Distance Selling) Regulations 2000 ( or DSRs as they are often mercifully abbreviated to) effect anyone selling goods without face-to-face contact, so it is wise to be at-least familiar with what your legal obligation as an online merchant are.

Who do the Distance Selling Regulations apply to?

In general, the regulations apply to anyone making a sale when they are not face to face with the customer (e.g. online, over the telephone, TV shopping, mail order etc), although there are exceptions to the regulations and special cases where the regulations don't apply in part. See the inset for a summary of these.

What is the purpose of the regulations?

The main purpose of the Distance Selling Regulations is to increase customer confidence in new forms of shopping, like the internet, and to provide an agreed Europe wide minimum standard. This is achieved by providing consumers with additional protection in situations where they are purchasing goods that they have not had the chance to inspect first-hand.

The crux of this additional protection is the provision of a mandatory 7 day Cooling off period and requirements for clear information to be provided both before a sale is made and in a written order confirmation.

Before a sale is made

The regulations lay down a new requirement that certain basic information be provided to the customer before the sale is made. This pre-contract information can be in any format appropriate to the sale, so is commonly included on a pre-checkout page of most Online Stores. If you are using an off the shelf solution for your site then you may find that this information is presented automatically.

The information that has to be provided to the customer before the sale is made is as follows:

• Your business name
• Your address
• A description of the goods/services that you are offering
• The full price that the customer will pay (including VAT & other taxes where appropriate)
• How long prices and special offers remain valid
• Details of delivery costs
• When the customer can expect delivery
• Information about the customers right to cancel
• If you ship substitute goods (for instance if the item ordered is out of stock), this must also be explained.

Before the sale is made you also need to provide customers with a change to identify and correct input errors. With Online Stores, this is most commonly handled by a confirmation page showing all order details and asking the customer to either return to change them or continue to make payment.

Order Confirmations

In addition to providing information before the sale is made, the regulations require that confirmation is given in a "durable medium". This can be hard copy that is, for instance, sent with the goods, but luckily for us online merchants can also include email.

The purpose of this confirmation is to provide the customer with important information that they can keep in case of a problem. For most stores this information should include the following:

• How customers may cancel the order, including how to return goods and who pays for the return.
• Details of any guarantees and after-sales service that apply to the sale
• Your geographical address
• Your delivery Arrangements
• Payment Options
• Your goods and or services
• written confirmation of this information after you have made your purchase
• A 'cooling off' period during which an order can be cancelled without any reason and a full refund made
• A full refund if the goods or services are not provided by the date you agreed. If you didn't agree a date, then you are entitled to a refund if the goods or services are not provided within 30 days

Delivery

Delivery must occur within the period agreed with the customer, or within 30 days of the order being placed if no timescale was agreed. If the goods do not arrive on time the customer is entitled to a full refund, unless they agree to give you more time.

Cooling Off Period

Once a sale is made, the customer now also has a Cooling off period, during which they may cancel without penalty. The aim of the Cooling off period is to give customers a chance to examine goods as they would if buying in a traditional shop. How long this Cooling off period lasts is dependent on how the order confirmation was dealt with by the seller:

• Where the seller provides written confirmation to the consumer on time, the Cooling off period is 7 working days from the day after goods are received (if no goods are involved the period instead runs from the day after the customer agreed to proceed with the contract).
• Where a written confirmation is provided, but later than it should have been (and still within 3 months), the period will last for seven working days beginning the day after the customer received written confirmation
• Where the requirement for written confirmation is not met, the cooling off period is extended by 3 months

During this Cooling off period the customer has an unconditional right to cancel the order.

Cancellations

Customers can cancel their order at any time during the Cooling off period described above. If a customer wishes to cancel the order they must inform you that they wish to do so in a durable medium (e.g. letter, fax, email etc). A phone call is not sufficient.

There are however some exceptions to a customer's right to cancel the order. Unless you have agreed otherwise, customers cannot cancel the order if:

• Goods were made the the customer's own specification (not including upgrade options)
• Goods that, by their nature, cannot be returned (e.g. gas or electricity)
• Goods where the price depends of fluctuations in the financial market
• Perishable goods, such as food or flowers
• DVDs, CDs, software, audio or video recordings that the customer has unsealed.
• Newspapers, periodicals or magazines
• Betting and lottery services

Return of Goods

On cancellation of the contract it is the customer's duty to return the goods and take reasonable care of them until they have been returned. Unless you have stated otherwise, you cannot charge the customer with the cost of returning goods. In the case of goods that are faulty or not as described, the cost or returning them is always down to the store owner. You are also liable for the cost of returning replacement/substitute goods if these have been provided.

If you require that the customer return the goods in the case of a calculation, you should stipulate this as part of the "durable" order confirmation. This way, if the customer fails to return the goods, or sends them at your expense you can charge them with the costs of recovery.

Refunds

Refunds must be made as soon as possible after the customer has cancelled the contract, or within 30 days at the latest. The regulations require that you must refund the payment even if you have not yet received the returned goods.

If you have made it clear in your written information that it is the customer's responsibility to return the goods at their expense and the fail to do so, you can charge them your direct costs of recovering the goods and offset that amount against the refund due. In this case you must still refund the remaining funds and cannot offset any other expenses against it.

This article is only provided as an outline to these important rules. If you want to find out more it is suggested that you contact the DTI, Office of fair trading or your companies legal representative.

- 26th August 2004

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