KNOWLEDGE BASE Ecommerce - Online Shopping In The UK

 

On March 29, 2017, UK Prime Minister Theresa May triggered Article 50, which formally started the process whereby the UK will leave the European Union. Article 50 was just the beginning of the withdrawal process, as it allows the UK two years to negotiate its leave with the other EU member states. UK laws and regulations did not and will not change overnight. We will update our site with any relevant changes and information as it becomes available. You can learn more on the UK government site.

 

Ecommerce - Online Shopping In The UK

 

In recent years there has been a huge increase in the number of e-commerce businesses worldwide. Not surprisingly, there has been a corresponding increase in e-commerce regulation worldwide. Not only can the laws and regulations be complex, but they can vary greatly from country to country. You should become familiar with and gain at least a basic understanding of the laws and regulations that apply to your business and because of the rate of technological advancement throughout the world, it is particularly important for you to remember that laws are fluid and subject to change. The United Kingdom has developed a legal and regulatory environment to adapt to the new digital age.

 

What laws and regulations apply?

If you are running an e-commerce business in the UK, some of the most important laws and regulations you should be familiar with are the Electronic Commerce (EC Directive) Regulations 2002, the Consumer Protection (Distance Selling) Regulations 2000, the Data Protection Act 1998 (DPA), and the Privacy and Electronic Communications (EC Directive) Regulations (PECR). More detailed information about how the DPA and the PECR apply to e-commerce can be found in the Data Protection Regulation and Email Marketing Regulations sections, respectively. There are also a number of consumer protection laws and regulations you must be aware of that govern sales contracts, reviews and endorsements, product guarantees, and refunds and returns. For more detailed information about refunds and returns, see the Billing Regulations section.

 

Electronic Commerce (EC Directive) Regulations 2002

Under the Electronic Commerce (EC Directive) Regulations:

  • you must clearly display your business name, company registration number, your Value Added Tax (VAT) number, your phone number, your email address, and your geographical address (a PO Box is not sufficient);

  • you must clearly display your website’s “terms and conditions;”

  • you must provide clear information on a product's’ price, tax, and the cost of delivery;

  • you must acknowledge all orders;

  • you must define all marketing offers and the conditions of these offers;

  • if you send unsolicited emails, you must identify them as being unsolicited;

  • you must clearly identify any emails to customers which are of a commercial nature; and

  • you must always identify the sender of any electronic communication.

 

The Consumer Protection (Distance Selling) Regulations 2000

The Consumer Protection (Distance Selling) Regulations 2000 govern distance sales, including online, digital television, by mail order or phone, text message or fax. For any distance selling, you must display the following information before an order is placed:

  •  your business name and contact information;

  • a description of your goods or services;

  • the price, including all taxes;

  • how a customer can pay;

  • delivery or shipping arrangements, costs, and how long goods will take to arrive;

  • the minimum length of a customer’s contract; and

  • information about the customer’s right to cancel within 14 days.

You must tell your customers they will be responsible for paying for the return of goods if they cancel the order. If you do not, they will not be liable for the costs.

 

You are also required to get in touch with your customer in writing after an order is placed and before the goods or services have been delivered. You must tell your customers:

  • details of what they have purchased;

  • the total cost;

  • delivery or shipping arrangements;

  • any guarantees or after-sales services you offer;

  • the minimum duration of any contract and arrangements for terminating the contract;

  • conditions for terminating contracts;

  • how and when they can cancel an order and who pays for returning goods;

  • an address where complaints can be sent;

  • any helpline (customer service) call charges that are more than calling an 01, 02, or 03 number or a mobile or free number.

For online sales, there are additional requirements, including:

  • listing the steps involved in a customer placing an order;

  • acknowledgment of you receipt of any orders electronically as soon as possible;

  • taking reasonable steps to allow customers to correct any errors in their order;

  • letting your customers know what language(s) is available to them;

  • making sure your customers can store and reproduce your terms and conditions, i.e., they can be downloaded and printed;

  • providing your email address;

  • providing your VAT number, where applicable; and

  • providing clear prices and delivery costs for your product(s.

There are special rules that apply to overseas sales and these rules vary depending on whether you are selling within the EU or outside the EU.

Selling Within the EU

You must charge VAT to EU customers the same as you would charge UK customers. If you are selling goods to customers and the value of the goods you sell in any EU country is above the “distance selling threshold,” you must register and charge VAT in that country.

There are special rules on registering for VAT if you sell digital services to customers in other EU countries. Digital services include: broadcasting, telecommunications, video on-demand, downloadable applications (apps), music downloads, gaming, e-books, software or software updates, downloadable trainings, tutorials, images, etc.

Selling Outside of the EU

You must not charge VAT for customers outside the EU. Instead, you must fill out customs declarations when you ship the product(s). You must keep proof of export if you sell to customers outside the EU, this includes:

  • the customer’s order, including their name and address;

  • internal correspondence;

  • sales invoices;

  • advice notes;

  • packing lists;

  • commercial transport documents;

  • details of insurance or freight charges;

  • bank statements; and

  • consignment notes.

 

Consumer Protection Laws and Regulations

In the UK, there are a number of consumer protection laws and regulations that work together for the protection of consumers in business transactions, to include the sale of goods and services and in-shop and online sales.

 

Unfair Contract Terms in Consumer Contracts Regulations 1998

The Unfair Contract Terms in Consumer Contracts Regulations 1998 regulate contracts between seller or suppliers and consumers. For more detailed information on the Unfair Contract Terms in Consumer Contracts Regulation, see the Competition and Market Authority’s Unfair contract terms guidance.

 

Online Reviews and Endorsements

The Competition and Market Authority also provides guidance on your use of online reviews and endorsements.

 

Product Guarantees

The Consumer Rights Act 2015 sets out the rules that apply when you (as a business) give your customers a free guarantee on goods. If you offer a guarantee, your consumers can require that you provide it to them in writing. All guarantees must include the following:

  • the name and address of the person giving the guarantee;

  • the contents of the guarantee, i.e., what it covers, what countries it applies in, and what you will do when a claim is made;

  • the duration of the guarantee;

  • directions on how to make a claim; and

  • a statement that the consumer has statutory rights that are not affected by the guarantee.

You cannot use the duration of the guarantee to limit your consumers’ rights. Consumers are entitled to expect the good(s) to remain of satisfactory quality throughout their reasonable life expectancy as long as they are maintained correctly and not misused.

Electronic Commerce (EC Directive) Regulations 2002

Consumer Protection (Distance Selling) Regulations 2000

Distance Selling Threshold

The Unfair Contract Terms in Consumer Contracts Regulations 1998

Unfair Contract Terms Guidance

Online Reviews

Endorsements

Competition and Market Authority

Consumer Rights Act 2015

KNOWLEDGE BASE Ecommerce - Online Shopping In The UK