A World of Online Orders and Its Challenges
In the digital age, where online shopping has become part of everyday life, it's more important than ever for businesses to understand and adhere to the laws and regulations surrounding remote purchases. Especially during holidays like Christmas, when e-commerce peaks, it's essential for businesses to be well-versed in the consumer legislation details. In this article, we will explore the importance of correctly informing consumers about the right of withdrawal and the potential consequences of failing to do so.
The Right of Withdrawal: A Fundamental Consumer Right for Even for the Purchase of Services
The right of withdrawal is the consumer's right to cancel a purchase of goods or services without reason. This right, governed by the Act on Distance Contracts and Off-Premises Contracts (in Sweden Lag 2005:59) ,aims to provide consumers with extra protection for remote purchases/orders, such as orders via the internet or phone, and for purchases made outside of business premises. While protecting the consumer, it also strengthens confidence in e-commerce.
It's important to understand that the Act on Distance Contracts and Off-Premises Contracts applies not only to e-commerce but also generally to the purchase of services conducted remotely or outside business premises. If a consumer orders, by phone or online, services such as alterations, repairs, installations, manufacturing, and demolition work, the Act generally applies. However, there are some exceptions regarding repair works in the consumer's home.
For the Act to apply to distance contracts, it is required that the company has an organized system for concluding contracts remotely, and that the communication between the company and the consumer exclusively occurs remotely. It may suffice in that regard that there is a form for ordering the service on the website or that the company refers to a phone number where it takes orders.
The Consequences of Failing to Fulfill Consumer Information Obligations
Companies selling goods and services remotely are responsible for informing the consumer about the right of withdrawal and other rights according to the Act. If the company fails in this, the consequences can be significant, including:
- Extended right of withdrawal period up to one year.
- No right to compensation for services partially or fully performed.
- The company pays the return cost, regardless of what has been agreed upon.
- No compensation for damaged or lost goods.
- No compensation for the depreciation of goods caused by the consumer handling the goods more than necessary to establish their characteristics or function.
The Information that Makes the Difference
To avoid these consequences, companies must inform the consumer about:
- the existence or not of a right of withdrawal and the conditions for it according to the law.
- The timeframe and process for exercising the right of withdrawal.
- That there is a standard form for the right of withdrawal.
If the company misses any element or provides incorrect information, it has the same consequences as if no information had been given at all.
Other information that the company should give to the consumer includes:
- Any costs for return that the consumer has to pay.
- Specific conditions for services that begin during the cancellation period.
- The consumer must explicitly request that the service begin during the cancelation period for the right of withdrawal not to apply to partially or fully performed services.
- Information that the consumer will pay a proportional share of the agreed price for a service that has been partially performed, otherwise the consumer doesn’t need to pay anything for a partially completed service.
When and How Should Information Be Given?
The information should be provided before the purchase/order, in a clear and understandable way, adapted to the communication medium used to take the order – on the website for internet marketing or verbally during phone calls. The information should, for example, be easy to find on the company's website during online purchases and be written in a way that the consumer normally has no difficulty understanding it.
When an agreement/order has been concluded, the company must provide the consumer with a copy of the agreement or a confirmation of the agreement. The copy or confirmation should be given in a document or, if the consumer agrees to it, in another readable and durable form accessible to the consumer.
Summary
To ensure a smooth purchase experience and avoid potential disputes, it's crucial for companies to be diligent in informing consumers about their rights, especially concerning the right of withdrawal. Creating clear and understandable guidelines not only protects the company but also promotes customer satisfaction and loyalty. Remember, a well-informed customer is a satisfied customer.
* Disclaimer: The information provided in this blog is based on Swedish consumer law and may not apply to other jurisdictions.