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IT Outsourcing

Is your eCommerce site legally compliant?

Pierre Peutin
Pierre Peutin
Chief Data Officer and Accounting / Financial IT Systems Consultant

E-traders, get ready for some new legal changes that may affect your business!

June 13, 2014 saw the adoption of the Consumer Rights Directive, a new EU legislation aiming to enhance consumer protection for online payments and purchases. Considering Pentalog’s positioning with regard to e-traders, it seemed quite interesting to focus on these provisions, as they have a great impact on eCommerce sites which, if not updated yet, have become non-compliant with the law.

But how might this legislation affect your business? Here are the main aspects that need to be brought in line before and after confirming the order (also called contract):

Before confirming the order

       1.  No more hidden charges and costs on the Internet

Before confirming the order by means of a very explicit button such as “Order with obligation to pay”, the user needs to be clearly informed about the exact description of the ordered product or service, its price and possibility of withdrawal. In most cases, a page displaying the details of the order before payment should be enough to fulfil these obligations, as it contains the delivery details (place and deadline), accepted payment methods, total price of the order and easy access to the Terms & Conditions with which the user agrees.

       2.  Banning pre-ticked boxes

A practice that is now banned consists in adding complementary items to an order with the user’s implicit agreement. In other words, it is no longer allowed to have automatically ticked boxes for additional items or services as extensions of the express warranty or delivery.

Once the order is confirmed and paid, all information regarding the sale just carried out must be provided on a durable medium. This concept is stipulated by law and a simple email (or paper mail) with the order details should suffice to fulfil this obligation. So far, nothing extremely complicated unless you need to modify your purchase process. But to do this, you still need the required skills and access to the platform.

After confirming the order

        3.  14 days to change your mind on a purchase

Another major innovation at both strategic and technical level consists in extending the period under which consumers can withdraw from a sales contract: from 7 days to 14 calendar days.

This means that the consumer must be very clearly informed about the conditions for returning the purchased goods. At this stage, it is very important for the user to know where to find the information on the goods return policy, how much it will cost and how to proceed.

         4.  Better refunding rights

As far as refunding is concerned, the new regulation stipulates that it also includes the delivery fees but only within the limits of the lowest cost delivery method provided on the site. Come to think of it, this is an interesting change as it allows e-traders to offer faster delivery options (hence more expensive, but particularly with a higher value added) which will not be refunded in case of product return, given that refunding cannot exceed the lowest cost delivery method.

Moreover, the user will perform these steps in writing, by post or via a form available on the site. Personal piece of advice: the online form is the best (standardized) method, as it eases traceability and shortens the processing time. In fact, it is absolutely imperative to confirm to the customer the receipt of the withdrawal request within valid deadlines. It goes without saying that the simplest and fastest confirmation method after submitting the online form is by email.

         5.  Means of payment

From this moment, the user benefits from another 14 days to return the product. It is within this period that the trader has to begin the refunding process via the same payment method used for placing the order. For example, if the transaction was made by credit card, you must make sure your system accepts credit card operations. If the transactions are made by means of another system (e.g. accounting), you must make sure that all information, particularly the refunding method, are sent to the tool in charge of your payment operation in due time, and that the accounting personnel is informed of these changes.

         6.  Waiving of withdrawal right

All in all, I should also mention that the withdrawal right may be removed for certain products (e.g. products with short expiration dates) or digital services. In the latter case, in order to accelerate the performance of the contract between the user and the site (remote maintenance intervention for example), the e-trader may inform the user that by ticking the box, he expressly waives his withdrawal right in exchange for the immediate performance of the contract. Here once more, a confirmation email must be sent to the user, thus allowing the platform to anticipate the changes.

Needless to say, all these obligations also imply a few simple technical changes (or more complicated ones, depending on the site architecture) provided that the e-trader has full control over his online sales platform. If this is not the case, you will need to immediately commission a service provider with qualified and readily available resources such as Pentalog.

Next week, I will go into more legal details on “How to make sure your site is compliant with the legislation in force?”

For more details on the subject, please contact one of our consultants by clicking here.

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