Online shops and consumer law – what you need to know in 2015

There were big changes to the law covering online shops and consumer rights in 2014 – and many online shops are breaking the law and don’t know it.

The new laws demand consumers get more information and rights than before, and for the first time imposed legal standards for online shops, and penalties for those who don’t comply.

When was the last time you checked to see if your shop complies with the new laws?

Consumer rights law 2015 – the basics

We’ve put together a quick guide that covers the basics, but if you want to be sure your shop complies we recommend you see a specialist lawyer.

This short summary will give an idea of what’s required and the infographic below adds a wider context.

Information you provide

You have to be upfront about everything, especially:

  • Provide full contact information, including your address and a non-premium phone number
  • Provide information on all payment options, your returns policy and delivery charges before checkout, including any extra charges
  • Provide receipts including all of the above

shopping cart photo

Everything must be in clear, easy to understand language, with no hidden charges or other shady practices such as automatically adding products to shoppers’ carts are all banned.

Much of this is common sense if you want anyone to buy from you, but it’s amazing how many online shops still don’t have this information, and it’s one of the main reasons why online shops fail.

Returns and cooling off period

In short, a customer can return a product bought at your shop for any reason, within 14 days of receiving it – until last year it was seven days.

You must have a simple, clear policy on returns and things like who pays for postage, as well as a returns form and these must be easily found on your website.

The rules are quite detailed on how this should be done, and there are exceptions for things like perishable goods and personalised goods.

Who do the new laws apply to?

The law applies to anyone who sells anything online, from physical products, to e-books, to appointments, courses and subscriptions. Selling online means where transaction takes place on a website.

The rules, especially for subscription and membership sites, are very complex and need to be looked at in depth. There are links to resources at the bottom of the page.

This infographic comes courtesy of Reflect Digital, on behalf of their client Waterfront Solicitors

Consumer Rights law UK and online shops infographic

Where to find out more about the Consumer Rights Directive

This post is only intended to provide a flavour of the law and the main points you need to look at and should NOT be taken as legal advice.

If you want to know the full detail, you’re going to have to do your homework and we strongly recommend you do, so here are some resources.

Official guidance from the EU and from the UK Government

The EU guidance document (in PDF format) is a massive 79 pages!

The UK Department for Business Innovation and Skills guide is a mere 26 pages: Consumer Contracts (Information, Cancellation, and Additional Charges) Regulations (PDF format)

If you still need help with how to comply

Then ask us for help. We can audit your site pointing out areas for attention.

Contact us to find out more.

Why online shops fail

Why online shops fail

If your business sells things in the real world, it’s simple enough to set up an online shop and just sit back and watch the money roll in.

That’s the theory but it rarely works out that way. Here are the main reasons why online shops become online flops.

[box type="info"]This post has been updated to reflect changes in UK consumer law introduced in 2014[/box]

We get asked to fix a lot of online shops and nearly always the complaint is the same: No-one’s buying.

Sometimes no-one’s visiting at all, but often when we look at statistics we can see plenty of visitors but few or no sales.

So why does nobody buy?

The answer lies in a combination of factors, assuming you are selling something people want to buy in the first place.

Computer keyboard and credit card
Get it right and the card will come out

Trust and credibility

These days the average web user is afraid of online fraud and needs reassurance. First of all they need to know who you are: They need your address.

It’s surprising how many shops ignore this basic rule but it’s more important than that – it’s the law in the UK.

If you are UK based and selling online, the Consumer Contracts (Information, Cancellation, and Additional Charges) Regulations 2014 apply to you. These replace the Consumer Protection (Distance Selling) Regulations 2000, and they are tougher.

Put simply, the regulations make up for the fact that online shop customers can’t inspect your products in person. But they are also a good framework for building a shop that people will trust.

Broadly, this means your shop should:

  • Provide clear information about the supplier, the goods or services and the sale in writing
  • Give shoppers the right to 14 working days in which to change their minds and return the product (though there are some exceptions)
  • Be totally clear on everything, from delivery charges and dates to any other charges you may make
  • Provide protection from credit card fraud.

By covering this you are answering questions potential buyers are bound to have, such as:

  • When will I receive my goods?
  • What if they are not the right size or otherwise unsuitable?
  • Am I safe giving my financial information to this shop?

If you are transparent about who you are and provide clear information about delivery, returns and how to contact you then that all helps to build trust. Oh, and it’s mandatory now, though many online shop owners don’t seem to know this.

Of course, the product descriptions must not be misleading!

Another big aspect of trust is the safety in numbers principle – that the shopper will feel safer buying if they know others are. This is sometimes called social proof.

You can help in this way by encouraging customers to review their purchases or write testimonials – but if your shop has a review facility and nobody has reviewed anything then this can have the opposite effect, and draw attention to your lack of customers.

To make this work you will need to give people an incentive to leave reviews or link to you on social media. More about the importance of trust and websites.

Poor promotion and management

Getting the shop right is only part of the job. To get people to buy from you you need to get them to your site.

This means you need to promote your site, whether offline through promotional leaflets and flyers, or online through methods like social media.

Who to target depends on what you sell, just like every shop needs to plan for how to get the visitors and the customers.

But once you have got the customers you need to be able to look after them and that means having the systems in place to staff the shop – answer questions, get the products to the customers and deal with any issues. These things don’t happen by themselves.

In the end your shop is a part of your business, just the same as any other part, and as such it will require some time and effort to run it.

Your shop is hard to use – or doesn’t work at all

If you build a shop, you MUST test it. It’s amazing how many times this is forgotten.

That means doing a test purchase to make sure everything works as it should and that you and the customer will get the right email notifications.

You should also test the contact form to make sure it sends email to the right place. We’ve seen a fair few shops where email enquiries disappear into a black hole – along with potential customers.

Nothing puts customers off faster than a shop with that doesn’t work properly – and that includes broken links.

Nothing except a shop that’s hard to use.

Getting around

Shops are generally big sites, which means it should be as easy as possible to find what you want. Navigation should be clear, simple and consistent and the search should be effective (often it’s not but nobody tests it).

Checkout and payment

Your customer has decided to buy and so you have to make it as easy as possible for them.

The best shops have a single page checkout where customers enter their details, review their shopping cart and proceed to payment: The worst have three or four pages to wade through, and won’t let you buy unless you set up an account first.

You also need to think about how people want to pay and give them as many options as you can.

Payment by cheque only, for example, is likely to lose you customers – who needs to wait for a cheque to clear before they can have their goods when they bought online in the first place to save time?

If you do nothing else, at least set up payment by PayPal as it is a trusted brand for online payments and offers some protection – and therefore more trust in your shop.

Other online shop ‘fails’

  • Text that’s too small to read
  • Product images that are too small and/or low quality
  • Not enough information about the products
  • Not focusing on the products – it’s a shop so the products must be front and centre
  • Being so clever or gimmicky that customers can’t use your site

More information:

Jeff Bullas blog: 12 Reasons I won’t buy from your website

The Floating Frog: 13 Reasons why your online shop will fail

E-Commerce Rules: Top 5 reasons Why your online shop will fail

The UK Department for Business Innovation and Skills: Consumer Contracts (Information, Cancellation, and Additional Charges) Regulations (PDF format)

E-Consultancy: Why does customer service suck online?

Photo credit: Fosforix via photopin cc