E-commerce businesses are extensive and there have always been a lot of small businesses classified as such. But we did see massive growth in this area over the last 2 years. Quite often people started out their venture as a side hustle or through necessity. Seeing new businesses grow is something we love to see. However, we have seen an increasing amount of e-commerce businesses pop up where they aren’t legally compliant. Because of this, we thought it would be useful to force this week’s blog on e-commerce.
Model cancellation form
Did you know that having one on your website is a legal requirement if dealing with consumers? If not, you are not alone in this, but it is important to ensure you now become compliant.
A model cancellation form is a template form that consumers can complete in order to cancel their purchase with you. However, you should note that whilst it is a legal requirement your customers do not have to use the same. In fact, they can cancel by any other means such as email.
What does an e-commerce model cancellation form look like?
These vary but you do have to ensure that they contain the minimum of:
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how they can give notice of cancellation and their rights around the same;
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what happens when the contract is cancelled;
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the date of cancellation; and
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name, address and signature of the consumer.
This form must be available to consumers prior to any sale being finalised.
What other requirements relate to e-commerce consumers?
As a business owner, you may have heard of the cooling off period. Essentially what this means is you have to give a customer 14 days to change their mind once they have made a purchase. This is where a customer purchases by means of e-commerce i.e. at a distance. This right only exists for consumers and businesses are not afforded the same protection.
It is important that you make a consumer aware of these rights. This includes the conditions, time limits and the procedures for cancelling. The exact wording you need will very much depend on the products you are selling and it’s important you get this right.
What if you fail to tell a consumer about their rights?
Failing to provide a consumer with the required information means that you are in breach of legal requirements. It also means that a consumer will be afforded additional time to cancel their items and make a return. You could also find yourself being investigated by Trading Standards.
Where does all of this information belong?
As we have stated you should have a model cancellation form available on your website. This can be by means of a link if needs be. All other information ideally should be contained within your Terms and Conditions. These are sometimes also referred to as “Terms of Sale” for e-commerce businesses.
Terms of Sale are designed to not only protect the customer but to also protect you. We always advise it is important to have a robust set of Terms of Sale to avoid any problems in future. We can draft bespoke Terms of Sale for you or if required review your existing terms.
The cooling off period
The cooling off period, in relation to consumers, does not mean that all products are entitled to a refund. In fact, there is a lot of caselaw around the same and sometimes interpreting them can seem a little confusing.
Digital products
If you offer digital products and the product has been downloaded your customer will lose their right to cancel if they have changed their mind. However, there is a proviso to this – you must ask them prior to purchasing to “waive their right to exercising rights under the 14 day cooling off period”. It is good practice to ensure they must tick a box to confirm the same.
Other items which can cause confusion
Similarly, some products such as perishables or hygiene items are restricted from the cooling off period.
What causes the most confusion is personalisation. People have assumed, wrongly, that all forms of personalisation are excluded from the list. However, a good question to ask here is:
“Can you sell the product reasonably easy to someone else?
So for instance a piece of fabric cut to say a fat quarter could be resold quite easily. However, a pink bear with silver crystals and the name “Petra” on it is unlikely to be resold easily. Although we do say if in doubt air on the side of caution and favour your customer.
If you are a new e-commerce business or perhaps you set up in a hurry it is not too late to ensure compliance. We understand that these matters can be confusing and this is why we love helping businesses. We can guide you through the process as well as offering our drafting services. So please do get in touch today should you need any assistance.