A subject which has often been discussed in previous ezines is one relating to return and refunds…
Of course, none of us likes to give a refund – luckily it is rare that I issue refunds or have to deal with returns – but unfortunately returns and refunds (for a whole range of reasons) are part of the game of selling, for online and offline businesses.
Are you aware of new rules form the Consumer Rights Directive (CRD) that relate to returns for online selling (distance selling) that will have to be implemented this month?
According to Amazon:
‘When Amazon customers place orders with you, they will be able to find the legally required cancellation form on our website. Customers can cancel orders through the Amazon Return Centre or by contacting you directly. When you receive a return request, you will have to determine your obligations under the CRD and can work directly with the customer to issue their refund (if required) and coordinate return shipping of their order. Please note that the CRD does not replace your customer returns obligations under your selling agreements with Amazon.’
In a nutshell, if a customer wants to return a product, business sellers have to allow this, and legally will have to refund the full cost of the return including postage.
Now of course, the new directive is grey news for consumers – and we should remember that as well as being sellers, we are also consumers, so it is good news that it is more difficult for customers to be ‘ripped off’ by unscrupulous sellers.
The official statement is as follows…
Consumer Rights: ways the new EU Consumer Rights Directive will give people stronger rights when they shop online.
Good news for consumers: new EU legislation will strengthen their rights in all 27 Member States.
EU Justice Commissioner, Viviane Reding said: ‘This is a good day for Europe’s 500 million consumers. Today’s adoption of the new EU Consumer Rights Directive will strengthen consumer rights by outlawing Internet fraudsters who trick people into paying for horoscopes or recipes that appear to be offered for free.
‘Shoppers will no longer be trapped into buying unwanted travel insurance or car rentals when purchasing a ticket online. And everyone will have 14 days if they wish to return goods bought at a distance, whether by Internet, post or phone.
‘The European Commission will help ensure that the new rules are implemented swiftly in all Member States so that consumers across Europe can have more confidence when shopping, whether online or offline.’
EU Justice Commissioner Reding made it clear that any agreement on the Directive would require a sound balance between consumers’ interest in stronger rights and businesses’ interest in taking full advantage of the EU’s Single Market.
Below are the main points that relate to the new directive – there are officially ten, but these are what I think are most applicable to me.
Some important changes for consumers in the new Directive…
(This is quoted verbatim.)
- The proposal will eliminate hidden charges and costs on the Internet: Consumers will be protected against ‘cost traps’ on the Internet. This happens when fraudsters try to trick people into paying for ‘free’ services, such as horoscopes or recipes. From now on, consumers must explicitly confirm that they understand that they have to pay a price.
- Increased price transparency: Traders have to disclose the total cost of the product or service, as well as any extra fees. Online shoppers will not have to pay charges or other costs if they were not properly informed before they place an order.
- Fourteen days to change your mind on a purchase: The period under which consumers can withdraw from a sales contract is extended to 14 calendar days (compared to the seven days legally prescribed by EU law today). This means that consumers can return the goods for whatever reason if they change their minds.
- Extra protection for lack of information: When a seller hasn’t clearly informed the customer about the withdrawal right, the return period will be extended to a year.
- Better refund rights: Traders must refund consumers for the product within 14 days of the withdrawal. This includes the costs of delivery. In general, the trader will bear the risk for any damage to goods during transportation, until the consumer takes possession of the goods
- Eliminating surcharges for the use of credit cards and hotlines: Traders will not be able to charge consumers more for paying by credit card (or other means of payment) than what it actually costs the trader to offer such means of payment.
- Clearer information on who pays for returning goods: If traders want the consumer to bear the cost of returning goods after they change their mind, they have to clearly inform consumers about that beforehand, otherwise they have to pay for the return themselves. Traders must clearly give at least an estimate of the maximum costs of returning bulky goods bought by Internet or mail order, such as a sofa, before the purchase, so consumers can make an informed choice before deciding from whom to buy.
Will this new directive mean that we are to expect an increase in giving refunds to customers who now have 14 days to return an item – at the seller’s expense?
We shall have to see, although I doubt it: most buyers purchase an item because they want to own it, so will not return their order.
Also many buyers will not want the bother of returning items and the hassle of going to the Post Office.
If you are not familiar with the Consumer Rights Directive, Amazon encourage you familiarise yourself with the law as there are several changes to how sellers must interact with customers.
For more information on the Consumer Rights Directive, I recommend you read the official pages from the European Commission.