Laws and regulations for online sellers

There’s a lot to consider when you’re selling online, but one of the things you might overlook is the laws for online sellers. As ecommerce grows, more and more rules and regulations are being brought in for online sellers, so it’s important not to get caught out over something simple. We’ve outlined all the laws that will affect you as an online seller, and what you need to do to comply with them.

Before an order is placed

The two main pieces of legislation that cover ‘distance sellers’ are the Consumer Contracts Regulations 2013 and the Electronic Commerce (EC Directive) Regulations 2002. Most of the requirements covered are common sense, but it’s worth double checking you’ve followed all of them.

These regulations apply to all online sales, including those on eBay and Amazon, apart from auction-style listings, and sales by private sellers. However, it is a criminal offence to represent your business as a private individual under the Unfair Commercial Practices Directive.

As a ‘distance seller’ you need to provide certain information on your website:

• Your business name and contact details
• A description of your goods of services
• The price, including all taxes (if you sell a subscription without a definitive upfront cost then be clear how the cost will be calculated - total cost per month or year, minimum duration and conditions for cancelling the subscription)
• How a customer can pay
• Delivery arrangements, costs and how long goods will take to arrive
• Information about the customer's right to cancel within 14 days

You’re also required to provide an order summary page just before the customer completes their order which needs to include the description of goods or services, the price including taxes, a clear breakdown of delivery charges and any other charges.

If the customer is responsible for paying the return costs you have to make this clear before they pay.

The button to finalise the order has to be “labelled in an easily legible manner only with the words ‘order with obligation to pay’ or a corresponding unambiguous formulation indicating that placing the order entails an obligation to pay the trader”.

If you are a registered company then you also need to state the place of registration, under the Companies Act 2006.

There are some additional requirements you need to follow as an online seller:

• Outline the steps involved in placing an order
• Terms and conditions have to be available in a way which allows a user to store and reproduce them
• You should acknowledge the receipt of an order electronically straight away
• State the name of the service provider if it's different from your trading name
• Display your email address
• Registration number of company
• Display your VAT number (if you're VAT registered)

After the customer has placed an order

Once a customer has purchased from your online shop you’re required to get in touch with them in writing (i.e. send an email) and tell them:

• Details of what they've purchases
• The total cost
• Delivery arrangements
• The minimum duration of any contract and arrangements for terminating the contract
• How and when they can cancel an order, and who pays for returning goods
• An address where complaint can be sent
• Guarantees or after-sales services you offer
• Any helpline call charges that are more than calling a 01, 02, or 03 number, or a mobile or free number.

Cooling off period

As an online seller your customers have 14 days to cancel their order and get a refund once they’ve received the goods, for any reason. Once they’ve told you they want to cancel, they then have to return the goods within 14 days, and you have 14 days to refund the customer when you’ve received them. The regulations don’t apply to perishables, CDs and DVDs or items where the wrapping would be broken, custom made and personalised items, and underwear and earrings etc.

The buyer also has 30 days from the date they purchased to claim a refund for a faulty item.

Selling online to the EU

The ecommerce regulations have a “country of origin” principle, which means that as long as UK businesses comply with UK laws they don’t have to worry about the laws of other member states, however this does not apply to consumer contracts. If you’re based in the UK and planning to sell to other EU countries you need to comply with UK laws, and the consumer laws of every member state in which consumers can buy your products. In general these laws are pretty similar in all EU countries, however there are some exceptions such as if you sell to France you have to have a copy of your terms and conditions in French, so you should do some research into the laws of each country.

Customer data

Data protection

If you collect personal details for either marketing purpose, or you store address details when people have placed an order through your online shop, then you need to register under the Data Protection Act 1998.  

• You need to have legitimate grounds for collecting and using personal data.
• Ensure "appropriate technical and organisational measures" to protect personal data against unlawful use, loss, destruction or damage.
• The data must be provided or removed if the person requests it.
• You need to state how you will use the data (can be included in the terms and conditions of your website).
• The data can't be transferred to any country outside of Europe, unless that country has an "adequate level of protection" for data.

Cookies

One other area of law you need to be aware of as an online seller is the Privacy and Electronic Communications (EC Directive) Regulations 2003 for using cookies. A cookie is a file that downloads to someone's computer or smartphone when they access your website, it allows the website to recognise the user’s device and store some information about their preferences and actions. For an online shop you may use cookies to store their log in details, remember items in the shopping cart while a customer continues browsing, or to track a buyers viewing habits.

If you use cookies you need to provide clear and comprehensive information about how cookies work and what their purpose is. To store cookies on a user’s device you have to get consent by a positive action (ticking a box, clicking a link). However, for functional purposes you don’t need consent, for example, when cookies are used to remember what someone has in their shopping cart.