Distance selling rules

Why have some retailers been in trouble over distance selling?

Next was last week accused of breaking consumer law by failing to refund delivery charges for items customers had bought online and then returned.

Littlewoods and Debenhams have also been accused of being in breach of the regulations.

After the investigation by the BBC Next has said it will change its policy from August.

What do the regulations say?

The Consumer Protection (Distance Selling) Regulations brought in during 2000 give consumers a seven day cooling-off period in which they can cancel contracts made online or at a distance.

Tricia Pearson, legal assistant at Shoosmiths’ commercial department, explains: “The seven days start on the date of delivery of the products, although this time limit can be extended in certain circumstances. The regulations also require online sellers to give certain information - such as the price of the goods and delivery charges - to consumers before or shortly after an order is placed.

“Under the regulations, a seller has to refund the money paid to the consumer if the contract is cancelled within the cooling-off period.”

Why the confusion?

Pearson says that it is the view of the Office of Fair Trading (OFT) that delivery charges should be part of the contract price. The counter-argument has historically been that a consumer makes two contracts; one for the goods or services and a second for the delivery.

The wording of the regulations has also been open to interpretation - consumers are entitled to a refund if they ‘cancel’ a contract. Some retailers have held the view that goods must be returned to them before the contract is effectively cancelled, something the OFT says contradicts the inherent aim of the regulations to protect consumers and to treat them fairly.

What should retailers do?

Retailers are advised to check their returns policies and procedures, and make sure that they state that delivery charges will be refunded to customers if they cancel during the cooling-off period.

The retailer should also state if it charges for the return of the goods. It may also permit the cost of returning the goods to be offset against the original delivery charges.

Retailers should ensure that refunds are provided to customers within 30 days of the date of the date of cancellation, even if goods have not yet been received from the customer.