Distance selling to consumers

Many businesses have had to adapt their sales practices and focus on ‘distance selling’, moving away from the high street and selling to customers online instead.

If your business is selling, or planning to sell, to the public via distance selling (through the internet, digital television, catalogue sales, telephone or fax), you need to familiarise yourself with distance selling regulations to ensure you comply.

The Basics

If you are distance selling, you’ll need to understand the Distance Selling Directive

The regulations exist to give consumers the same rights and protections they would have buying on the high street – like examining goods beforehand or discussing the terms of service.

As a customer isn’t able to try on the new pair of shoes prior to purchase through online shopping, you’ll understand why there is a need for distance selling regulations to protect both business owner and consumer.

The regulations apply to both the sale of goods and to services.

There are, however, several areas to which the regulations do not apply:

• Business to business contracts
• Financial services
• Auctions
• Hire purchase contracts
• Property sales, freehold or leasehold interests
• Automated vending machines

You must give consumers ‘prior information’ on your website

If you’re selling from a website or via an internet-hosted page, this source must clearly state:

• Your trading postal address (a PO box won’t be acceptable here)
• A properly detailed description of the goods or services
• The price of the goods or services (including VAT, if applicable)
• Delivery fees (if applicable)
• How the consumer should pay (e.g. by card, PayPal, cheque, etc.)
• When the goods or services will be delivered (if applicable)
• Details on cancellation (This should include a link to an online cancellation form, or a statement advising that the consumer can also cancel in writing, along with contact details for doing so, as well as the timeframe for cancelling, i.e. the cooling-off period)
• A statement that the consumer is responsible for the arrangement and cost of returning the goods (if applicable)
• How long the contract is for, including how long the price will be valid (if applicable)
• For digital goods only, you must advise about the functionality of the product; for example, how the consumer can download, access and use the digital files

This information should then be repeated on the consumer’s contract confirmation, which should be provided to them in writing once the contract has been agreed.

The buying process should be clear to consumers

Sales online

If you have an online shop, consumers must be clear how to buy the goods or services offered, and at what point they have confirmed and made the purchase and triggered the obligation on you to fulfil it.

For most online sales, the point at which the consumer confirms their desire to buy is where the consumer finishes inputting any identification and delivery information, payment details have been provided and the button ‘confirm order’ (or its equivalent) option is clicked.

The consumer should then receive a confirmation stating that the order has been received and is being processed.

If all the identity and payment details are confirmed as acceptable, the seller should then confirm that the consumer’s order is accepted and will be fulfilled.

Customer service phone lines must be reasonably priced

If a consumer needs to phone a business to complain or cancel their purchase, for example, they must be able to do so without unnecessary expense.

Under Irish law, a business’ phone lines mustn’t charge more than the basic rate for incoming calls – i.e. you must allow customer to phone you on a regular phone number rather than a premium-rate number.

The consumer must be given a 14-day cooling-off period

When purchasing from a distance sale, your customers have the right to cancel their purchase within 14 days of the date they receive the goods.

This 14-day period is often referred to as a ‘cooling off period’.

A ‘cooling off period’ is a period following the sale being confirmed by the consumer and accepted by the business, in which the consumer has the legal right to change their mind about making the purchase and can cancel it.

The law permits the consumer to change their mind, for any reason, and obliges the business to provide a model cancellation form so that the consumer can cancel the contract with ease.

If you fail to provide the customer with written confirmation of their right to cancel, then the 14-day cancellation period is extended.

The sales contract can be cancelled either by the consumer completing a cancellation form (which must be easily discoverable and available to them as part of your sales and after sales process), or by the consumer clearly communicating their cancellation to the business, whether by email, letter, or phone.

If the consumer does cancel, as a business, you must refund the amount the consumer paid you, within 14 days of you:

1. receiving the goods back
2. receiving proof that the goods are on their way or
3. for service contracts, from the date of cancellation.

If you haven’t stated otherwise in your sales contract, as the business, you’ll be responsible for the return shipping costs incurred by the consumer.

But, in most cases, you’ll probably be entitled to deduct money from the refund amount payable, to cover any loss in the value of the goods once the buyer has returned them.

However, where the goods are damaged on return, and the damage was caused by events arising while they were in the consumer’s possession, the position is different.

How does a cooling off period work with sales of products or services that are immediately or rapidly consumed?

Here, you still have to provide for a cooling off period, but any entitlement to a refund must take into account what has been consumed by the consumer – and therefore what (of value) can feasibly be returned.

The right to cancel doesn’t apply to…

In addition to goods or services with a short expiration date, the right to cancel also doesn’t apply to:

1. digital goods that have been downloaded within the 14-day cooling-off period
2. goods with a price that’s variable according to financial market fluctuations (not including from the supply of water, gas, electricity, or heating – to which the right does still apply); and
3. goods that are custom-made for the consumer.

Also exempt are newspapers and magazines that are supplied without a subscription contract; and if the seal on an audio, film, or computer software product has been broken by the consumer, it is also exempt from the right to cancel, unless the product was faulty.