What is the aim of the directive?
The aims are noble enough, and broadly look to encourage more online shopping across the EU by eliminating dodgy practices such as pre-ticking boxes and hiding costs.
According to the impact assessment from the Gov.uk website:
The aim of the directive is to encourage growth and consumer confidence through the harmonisation of rules in a limited number of areas so that traders and consumers face only one set of requirements wherever they sell and buy and sell in the EU.
These areas are: Information to be provided when consumers buy goods and services. The Directive sets out what information must be provided and some rules on how and when it must be given. Cancellation rights and responsibilities for both traders and consumers where goods and services are purchased at a distance or off-premises.
Clarification of delivery dates, and the passing of risk where goods are delivered. Prohibition of certain practices which can lead to hidden costs.
The EU proposals
The directive aims to remove the risk of ‘cost traps’ such as people being tricked into paying for free services like horoscopes or recipes. The aim is make it explicit to customers that they have to pay for such things.
Customers have to be informed of the total costs of the products or services they buy, and online shoppers will not be liable for any extra fees if they weren’t informed at the point of purchase.
This is a crafty trick, and one which websites should never use if they care about customer experience. Good riddance.
This is old example from BHS, with £150 of extra charges for unwary customers.
14 Days to change your mind on a purchase
This is an interesting one, and it’s not clear so far how it fits in with existing legislation on returns. It has implication for companies’ cashflow, with this period doubling from the current seven days.
I would also assume that perishable goods, things like software and other items which are currently excluded would remain so, but this is something we’ll look to confirm.
Clarity on returns charges
Retailers will need to make it clear before a sale who is responsible for the cost of returning goods.
I would argue that, in general, retailers shouldn’t be charging for returns as it can deter customers from a purchase, but they also have to weigh up the costs and benefits of doing so.
Changes to buttons?
This, on the face of it, may be the most alarming proposal, and seems to relate to the ‘cost traps’ mentioned above.
It suggests that buttons customers use to place orders online would need to explicitly state that an obligation to pay goes along with placing an order.
If a distance contract to be concluded by electronic means places the consumer under an obligation to pay, the trader shall make the consumer aware in a clear and prominent manner, and directly before the consumer places his order, of the information provided for in points (a), (e), (o) and (p) of Article 6(1).
The trader shall ensure that the consumer, when placing his order, explicitly acknowledges that the order implies an obligation to pay. If placing an order entails activating a button or a similar function, the button or similar function shall be labelled in an easily legible manner only with the words “order with obligation to pay” or a corresponding unambiguous formulation indicating that placing the order entails an obligation to pay the trader. If the trader has not complied with this subparagraph, the consumer shall not be bound by the contract or order.
If you take this literally, then it could mean that something like this is required:
However, it could just be intended for the dodgier websites placing cost traps, or as a replacement for the final ‘confirm order’ button rather than for use on product pages where it would be a barrier to purchase.
I want to stress that these proposals are just that at the moment, and are yet to pass through parliament. As with the EU ‘cookie law’ there may be a difference between the proposals and the implementation.
Any changes in refund windows and to call-to-action buttons would obviously be a concern, but the rest of the proposals shouldn’t worry respectable online retailers, and much of this just constitutes good practice.
We’ll be updating you on these proposals when we know more…