E-commerce Business? Stay On The Right Side Of The Law

February 18, 2021

There has been a huge boom global boom in e-commerce. COVID-19 has changed the way we live our lives – how we communicate, how we work, how we shop and how we run our businesses. Almost year into the crisis, lockdowns and the various social-distancing measures have meant UK consumers have become far more reliant than ever before on the internet to do their shopping. Recent figures have revealed UK online sales grew over 36% year on year in 2020. Meanwhile, the internet’s share of total retail sales surged through the year, reaching a high of 36.2% in November.

And it’s not all about Amazon and the big grocers. The change in consumer behaviour caused by the pandemic has fuelled an enormous increase in small internet-based start-ups. Thousands of existing brick & mortar businesses have pivoted to digital sales via e-commerce to embrace the change, and in some cases, to stop them from going bust.

Crucially, all the signs point to these new consumer trends becoming permanent habits after crisis has abated. So, 2021 should see many new e-commerce start-ups as well as more traditional operations adding e-commerce capabilities to their armouries. 

But whatever stage your business is at with selling online, there are many e-commerce rules and regulations you need to comply with. You simply can’t assume you’re not affected. You need the right information to make sure you stay on the right side of the law and stop the worry and costs of potential legal action.

A great resource is the Business Companion website. It’s a government-backed information website which provides impartial, up-to-date and free guidance on trading standards and consumer protection laws for e-commerce and bricks and mortar businesses.

Distance Sales Regulations for E-Commerce

These rules generally cover any sale of goods, services or digital content where there is no face-to-face contact with the consumer. They blanket cover a wide variety of sectors (phone sales, mail order for example). Online sales are also included in this. But there are specific extra regulations covering the e-commerce and digital world too.

At a basic level, you must be completely transparent with the information you give to consumers. A proper trading address, clear pricing and labelling, a complaint-handling policy and cancellation rights are all must-haves.

If any additional payments (i.e for faster delivery) apply, you must get the consumer’s clear agreement before charging. No agreement, they don’t have to pay. All sales must be followed up with paper or email confirmation. And if you send any goods to a customer that weren’t clearly bought, they are entitled to keep them as a gift. You also have obligations to ensure delivery. You’re responsible for the goods up to the point the consumer takes possession of them.

Selling Goods Via Online Platforms

Many businesses (especially new start-ups) don’t sell directly through their own e-commerce channels but through third-party online platforms such as eBay, Amazon, and increasingly, via social media such as Facebook.

Businesses elect to do this to take advantage of the huge audiences these platforms offer. They can also handle advertising, checkout, customer services and shipping. But, while these sites might handle many of the business processes, you still have legal obligations to follow and there are extra regulations too. Notably, the rules can change depending on whether you are selling to another business or consumers.

Again, full transparency is required with regard to company names, trading addresses, prices, payment, delivery costs, taxes, guarantees and cancellation rights. If you sell items to buyers outside in the UK, you’ll also need to comply with the law within their country. While the UK’s regulations are largely harmonised with the countries of the EU, you can’t take anything for granted. Selling to countries outside the EU brings other regulations that require compliance.

Crucially – do not assume that using online platforms automatically ensures you are following the law. In legal terms, currently they are only seen as providers of digital infrastructure to facilitate trade. You are ultimately responsible for ensuring you are following the law.

There are many other potential pitfalls when selling online and keeping on top of everything isn’t easy. So how can you make sure your business is fully compliant when selling online?

E-commerce advice from Business Companion

Whatever stage you are at as a business, a great place to start is by referring to the Business Companion website. It’s a government-backed information website which provides impartial, up-to-date and free guidance on trading standards. It also covers consumer protection laws which affect the products you sell or services you deliver.

Learn how the law sees your business, with Quick Guides taking you through the basics and In-Depth Guides for when you need more comprehensive advice. There’s invaluable advice on all things digital and so much more. It’ll help your e-commerce business stay on the right side of the law.

Business Companion covers trading standards law for England, Scotland and Wales. For guidance on the law in Northern Ireland, please see nibusinessinfo.co.uk. 

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Whatever stage your business is at with selling online, there are many e-commerce rules and regulations you need to comply with, and you can’t assume you’re not affected.
Rhys Hughes
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E-COMMERCE START-UPS & SMEs