Under a new regulation, online retailers will now have to be more rigorous when it comes to telling customers about their cancellation and refund rights - or face a prolonged wait for their money.


Both UK and European retailers that sell over the internet will have to tighten up their procedures following a new ruling this month by the European Court of Justice.

Under the Distance Selling Regulations, which apply to all sales to consumers at a distance, shoppers must be given some basic information, including that they have rights to cancel their order and get a refund.

Now, the ECJ has ruled that consumers must actively receive this information rather than just be told where to access it online: it is no longer enough simply to provide a hyperlink on a website, which many retailers do.

Best practice now, according to law firm Charles Russell LLP, is to send a personalised email to the customer with order confirmation.

The regulations have always included a penalty for failure to provide information properly. The cancellation period is seven working days from delivery if the information is provided. If not initially provided, then it is seven working days from when provided, and if never provided the cancellation period grows to three months.

Online retailers that fail to comply with the new ruling will not be sure that they have actually banked the cash for a sale for three months, because a consumer could change their mind and ask for a refund at any time during that period.

Vanessa Barnett, partner at Charles Russell, said: "It's vital for all online retailers to audit their sales process and terms and conditions for compliance with Distance Selling Regulations."

She said there was now a significant difference between a consumer actively being given important information or being told where to find it: "The consequences of not getting it right are material - it essentially extends a consumer's cancellation rights period to months rather than a week."

She added: "This is good news for consumers because it will create an environment where consumer rights are better known and easier to exercise, which ultimately will lead to fewer disputes."

Retailers should also bear in mind other changes on the horizon which affect online retail such as the Consumer Rights Directive and data protection reform.

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