Joanna Tall founded a virtual law firm specialising in female entrepreneurs. Her speciality is advising on all things that make a business tick. Here she explains the basics of a consumer’s right to cancel as laid out in the Consumer Protection Distance Selling Regulations which affect businesses that sell products or services in the EU without meeting their customers face to face. As with any business regulations, be sure to research how these rules affect your own circumstances. HMRC has many resources, and you can also visit Joanna at her website OffToSeeMyLawyer.com, for more information.
Your customer’s right to cancel-whether you like it or not!
Your Etsy shop is live, the catalogue of goods and services enticing, the shopping cart eager to be filled! And then the excitement of the first sale! You package up the item, post it and wait eagerly for that first positive review. But did you know that in the UK and most of Europe, every consumer customer has the right to return an item bought online?
Not many on-line traders are aware of the Distance Selling Regulations which kick in whenever a contract is concluded without meeting customers face to face (or cheek to cheek if you live in France- actually only joking!). So this applies to on-line sales as well as contracts made over the phone. Whilst this is the law in the UK, similar rules apply to Members of the European Union as the law started off as a European regulation.
The good news is that the regulations only apply to “consumer” customers as opposed to business customers. Also, customers have a limited amount of time in which they can change their minds: 7 days from the day after they receive the goods. In the case of services that have been ordered, the 7 days start from the date the order is concluded. In the rest of Europe the time limit is 14 days generally, but please check your local laws. The United Kingdom is also considering extending the limit to 14 days also so as to bring itself in line with the rest of Europe. So if you have an urgent contract for services that your customer wants you to start right away, you must get them to expressly waive their cancellation rights.
The other bit of good news is that cancellation rights do not apply to certain types of contract such as those for bespoke goods or software which has been opened/downloaded.
So what happens when your customer cancels the contract as set out above? Well, you have to refund their money including the delivery charges within 30 days of the date of cancellation. You should state in your terms that the customer has to pay for the return postage or make the goods available for collection.
Finally, there is no good hoping that if you don’t draw your customers’ attention to their right to cancel, the 7 days will slip away unnoticed. The regulations say that you must point out the right to cancel before your customers place their orders. Typically, your Etsy listing should do this. Simply put a link to your product terms and conditions and the right of cancellation in every listing.
Ask questions in the comments below and visit Joanna’s website, OffToSeeMyLawyer.com, for more information.