A client contacted us recently asking if she needed to give a refund to a customer who bought goods from her and wanted to return them. A lot of us are fuzzy in our understanding of this aspect of the law, and the consumer in us says ‘of course the customer gets their money back!’. But that’s not always the case…
Our client came to us with a situation something like this:
Jane’s Online Stationery store sells a box of 20 pens to Bills Online Stationery Store which sells direct to consumers.
Bill’s Online Stationery Store sells on those 20 pens to a single customer. The customer takes receipt of the pens, decides she doesn’t like the colour, and rings Bill saying she wants to return them and get her money back.
Bill is a bit non-plussed, so he rings Jane and says he wants HIS money back.
The pens weren’t faulty. So who has to refund who?
If you’re selling goods or services online in the UK, then you should be aware of the Distance Selling (now Consumer Contracts) regulations. These regulations were created to encourage confidence in consumers buying over the internet.
Our customers who sell B2B (businesses selling to other businesses) may be pleased to hear that they’re exempt from the Consumer Contracts (formerly Distance Selling) regulations. But they still must comply with the E-commerce regulations, which apply to any sales made electronically.
Being exempt from the Consumer Contracts regulations means that if you sell to businesses then your returns/cancellation policy is governed by your contract with that buyer i.e. your own Terms of Service.
So it’s definitely worth defining a B2B sales contract that includes a clear returns policy to reduce any returns quibbles you may have in future.
So, who has rights here? Can the customer get her money back? Can Bill get his money back from Jane?
The answer is cut and dried. Bill is obliged to give his customers her money back for her unwanted pens as the transaction is covered by the Consumer Contracts (formerly distance selling) regulations, but Jane does NOT have to give Bill his money back, because as a business to business transaction, it is EXEMPT from the Consumer Contracts (formerly distance selling) regulations, and Jane’s terms of service clearly state that no refunds are to be given.
Note: We’re web designers and digital marketeers – not legal experts. This article isn’t meant to be a complete explanation of the laws about distance selling in the UK, and you should always seek proper legal advice for your particular circumstance. If you need help, give us a call on 01943 968262 and we’ll put you in touch with some of our legal clients who specialise in this area.