With more and more businesses now selling online, it is important that they bear in mind the rules that govern what is known as distance selling.
There are specific rules, over and above those that cover the general sale of goods and services, which a business that sells to customers online or via email, as well as by phone, fax and mail order catalogue, must observe. These are set out in the Distance Selling Regulations and apply to sales where the customer is not physically present when a purchase is made.
The regulations only cover transactions between firms and customers and do not apply to transactions between two businesses.
Complying with the rules
To comply with the regulations, a business must offer customers clear and specific information before any contract is entered into or sale made.
A firm selling online or via email must provide: its business name and, where payment in advance is required, its postal address; a description of the goods or services; all prices, including any taxes; the cost of delivery, if that applies; arrangements for payment; arrangements and the date for the delivery of the goods or for carrying out the service (in the absence of a specified date this is deemed to be within 30 days of the order); information on any after-sales services and any guarantees; the length of time for which prices or any offers are valid; the minimum duration of a contract; the rights of the customer to cancel an order, details about the procedure for cancelling an order and information on who must take responsibility for the cost of returning goods in the event of a cancellation; details about whether the business will supply substitute goods if those ordered are not available and whether the business will cover the cost of the return of the substitute goods if the customer cancels the order; and information about the customer's right to cancel a contract in cases where the contract is indefinite or is for more than a year.
Customers must be given a 'cooling-off period' in which they can cancel an order or contract.
Where the supply of goods is concerned, the 'cooling-off period' usually extends to seven working days after the date on which the goods were received. Where the supply of services is concerned, the 'cooling-off period' usually extends to seven working days after the date on which the order was made or a written confirmation of the order was received. If, however, a business does not offer details on the cooling-off period, then a customer may be entitled to take a longer period of time in which to cancel an order.
A customer who wishes to cancel an order must do so in writing, be it by letter, fax or email. The business must refund any money the customer has paid within 30 days.
The right to cancel is not, however, universal. Customers are not allowed to cancel if the contract or the sale involves, among others: accommodation, transport, catering or leisure services, where these are supplied on a specific date or for a specific period of time; food, drinks or other goods delivered regularly to the customer's home or workplace by a 'regular roundsman' like a milkman; customised goods; goods that are perishable or can't be returned, like fresh flowers; sealed audio or video recordings or computer software that the customer has opened; newspapers or magazines; betting, gaming and lotteries; or services that are agreed to begin before the end of the cooling-off period.
All the information that a business must supply in order to comply with the regulations should be provided in written form or should be confirmed in writing before any order is placed or purchase made.
This is only an outline guide to the Distance Selling Regulations, more details about which can be found at the Office of Fair Trading website at http://www.oft.gov.uk