A websweep conducted by the Office of Fair Trading (OFT) found concerns on the websites of the top online retailers, what can you learn?
By Judith Frame, Head of Marketing, Office of Fair Trading
What was the problem?
Distance selling, particularly online, is becoming an increasingly popular way to buy and sell goods and the market is set to rise by 15 per cent to £31.2m in 2012 (e-retail in the UK 2012, Verdict).
As more companies start selling online and more consumers are buying online, compliance with the Distance Selling Regulations (DSRs) becomes ever more important to ensure that consumers are being treated fairly.
Worryingly, business awareness of the regulations when selling online is low. Only 38 per cent of staff who are responsible for ensuring that their business complies with consumer law considered themselves familiar with the DSRs (OFT Drivers of Consumer Compliance report 2010).
Businesses also have to contend with consumers’ increased knowledge. There were 1.4 million more online shoppers in 2011 (compared to 2010, Verdict, 2012). An OFT consumer survey in the same year showed that they were more aware of their right to cancel if they changed their mind compared to 2009.
However many of them are still unclear about their rights with a lot of online shoppers being unaware of the 7 day limit to their cancellation rights, on average thinking it was at least 15 days.
So, what did the OFT do?
As part of the OFT’s ongoing work to support business compliance and ensure that consumers can shop confidently online the OFT ran a websweep of 156 top online retailers. The sweep looked for potential breaches of the Distance Selling Regulations (DSRs) and other online selling consumer protection laws.
What did the sweep find?
It was good to see that the sweep found high levels of compliance across the board, but it also highlighted five key areas of concern .
One area of concern was that 60 per cent of sites only provided a web contact form rather than an email contact address and two per cent provided no electronic contact details at all. Providing an email address is required by the E-Commerce Regulations to make it easier for customers to contact retailers.
Also concerning was the fact that a third of the sites which provided information on the right to cancel imposed unreasonable restrictions on customers’ rights to a refund. The most common of these was requiring that the product must be in the original packaging or in the original condition when returned, which denies consumers their right to reasonably inspect a product.
The five key compliance areas to tackle are:
• providing a full geographic address
• providing a proper email contact address
• flagging up hidden or unexpected charges early in the buying process
• being clear and open about cancellation rights
• Not clearly offering a full refund including refund of outward/original delivery charges if the consumer cancels.
There were high levels of compliance with the DSRs when sites were providing other required information to customers. For example, 99 per cent of sites provided details on when the goods would be delivered or the service would start and 95 per cent provided a full geographical address when payment was required in advance.
What action did the OFT take?
It goes without saying that most businesses want to comply with the law and treat their customers fairly, so following the sweep the OFT wrote to 62 companies advising them their sites did not fully comply with consumer protection law, pointing out the five key areas of concern and asking them to check their website.
We are also using the findings to help other businesses easily identify the areas on their websites they should check.
How can compliance benefit your business?
The benefits are clear. A good reputation attracts customers and can lead to repeat sales, but good customer service is about much more than a friendly face or an easy to navigate website.
Shoppers who are confident that a retailer will respect their rights are more likely to trust and buy products from that business. They are also more likely to provide positive reviews online and give recommendations to friends and family.
Providing greater upfront transparency about the rights your customers have and providing the required information clearly can not only help generate a positive customer experience, but also save you time and money by decreasing consumer enquiries, complaints and problems.
You should also note that traders who are not complying with the law do risk more formal enforcement action from the OFT or Local Trading Standards Services.
What can you do?
Take note of the five key areas of concern, check your website and make any updates necessary.
If you need more information on each area we have materials and tools on the Distance Selling Hub, which includes DS Explained, a booklet providing more detail on the issues identified in the sweep and other areas of distance selling law. There are also checklists and case studies that will help you further understand the law as well as help train your staff.
You could also share this short video with your customers so that they better understand their rights when shopping online. ‘Buying online: know your consumer rights’.
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