The internet has transformed the way we buy and sell goods, particularly when it comes to the food and drink industry.
E-commerce represents a significant proportion of the retail market, with a growing population of over 1 billion online buyers. In Europe much of the online trade is confined to a consumer’s individual country due to concerns about delivery, potential complaints and returns.
The EU Consumer Rights Directive (which adapted the old Distance Selling Regulations) was introduced in June 2014. It aims to harmonize European laws, offer consumers’ better protection and help retailers manage online sales. We take a look back at some of the changes:
1. Pre-contract information: information on the retailer, product and consumers’ rights has been extended. This must now be made available before the consumer is bound by the contract and also supplied in hard copy format post contract
2. Cancellation period: retailers must provide consumers with a 14-day “cooling-off” period in which they may decide to change their minds, cancel the contract, return the goods and receive a full refund. If retailers do not provide clear information about the consumer’s right to cancel then the period can be extended to up to 12 months. Exemptions apply for perishable goods, goods that have been personalised, or for hygiene reasons. In the case of perishable goods (such as fresh foodstuffs) the general rule is that if the goods are liable to deteriorate or expire rapidly then the 14-day “cooling-off” period does not apply and, unless agreed with the trader, the consumer will have no right to cancel
3. Cost of returning and refunds: the retailer must bear the cost of returning the unwanted goods during a cooling-off period and must refund consumers within 14 days of a cancellation – provided that the consumer returns the goods within this period and the consumer has a right to cancel
4. “Pay now” order button: if a consumer is required to pay for goods or services during the purchase process, this must clearly be displayed. The UK Government guidance suggests that a button marked “pay now” would be sufficient
5. Cancellation form: consumers must be given certain information about their cancellation rights. Whilst retailers may continue to provide their own cancellation forms they must, as a minimum, now make the standard EU-wide withdrawal form available
6. Pre-ticked boxes and hidden charges: hidden charges are not allowed. Consumers will not be bound by charges or other ‘up-sells’ or ‘data mining’ activities unless they have expressly agreed to be bound. Pre-ticked boxes are prohibited
7. Food information and labelling: consumers need clear, accurate and consistent information about the food they buy. The directive ensures that there is:
Mandatory nutrition labelling on pre-packaged food
Country of origin labelling
Improved date marking
Clarity and legibility of food information
Labelling on non pre-packaged foods
Allergen information, including on food sold loose and in restaurants, cafes etc
Delivery: goods and services must be delivered within 30 days unless otherwise agreed. Retailers need to be clear and explicit on what constitutes delivery and when it will occur. Foods that need to be refrigerated and are sent by courier should be delivered as quickly as possible, ideally overnight, and be kept cool until delivery. All foods must be delivered to consumers in a way that ensures that they do not become injurious to human health or unfit for human consumption. Food packaging must be strong enough to remain intact and may need to be packed in an insulted box with a coolant gel, or in a cool bag. Any packaging should be capable of protecting the food while it is in transit
M-commerce: increasingly goods are bought via mobile apps and smart devices. Where there are space constraints, only certain pre-contract information need be provided such as the goods’ main characteristics, retailer identity, total price, additional charges and costs, and cancellation rights. Other required information may be provided in another “appropriate way”
Consumer helplines: premium rate helplines are no longer allowed. A consumer must only be charged at the basic rate
How does it affect the food and drink industry?
Many of the provisions imposed will not apply to the food and drink industry. For instance, the directive states that it shall not apply to contracts “for the supply of foodstuffs, beverages or other goods intended for current consumption in the household, and which are physically supplied by a trader on frequent and regular rounds to the consumer’s home, residence or workplace.” Retailers must, however, be aware of the implications of the directive and the additional requirements being introduced by the Consumer Rights Act 2015 (due to come into force on 1 October 2015) which will provide greater protection for consumers.
If you are involved in a dispute relating to distance selling, or are looking to update your terms and conditions, and would like advice on this or a related topic, please contact Richard Slater.
Richard is a member of the dispute resolution team in Exeter and specialises in commercial litigation. He advises on a wide range of matters relating to consumer and financial services disputes.