Consumer Rights Directive approved by European Parliament

Updated July 2011

Further to our recent update (see Related publications) on the Consumer Rights Directive, the new EU-wide rules for online shopping have been overwhelmingly approved by the European Parliament.

An agreement was reached between the Parliament and Council in early June. This removed some of the most controversial changes in the Directive, including a rule that would have required traders to pay for the return of goods priced over €40 and a requirement for retailers to make their goods available to all EU member states. This is good news for retailers as the returns policy and cross-border selling requirement in particular could have proved disastrous – especially for smaller retailers who work on tighter margins.

However, there are still big changes ahead which include:

• the doubling of the current seven day cooling period to 14 days, with failure to notify customers automatically extending the period to a year. Certain products are, however, exempt from the withdrawal right including magazines, car rentals, airline tickets and hotel bookings, perishable goods and customised goods;
• the halving of the time in which a retailer must refund a customer – from 30 days to 14 days;
• the need for retailers to give consumers clear key information prior to the conclusion of a sale including the main characteristics of the product, the identity and address of the seller, the price inclusive of taxes and all additional delivery or postal charges and whether any returns charges are payable by the consumer. Where the retailer does not comply with the returns charges information requirement, the consumer will not have to bear the cost of returning items;
• the need to deliver goods within 30 days (with the trader responsible for the cost of damage or loss of the goods until received by the consumer). Otherwise the consumer has the right to cancel the purchase and obtain a refund;
• the right for consumers to the repair or replacement of defective goods up to two years from purchase otherwise a refund must be given. However, this may be extended by member states to ensure a higher level of consumer protection; and
• the need for retailers to make it clear to which countries they deliver to and why they do not deliver to specific countries.

Now that the Directive has been voted on by the Parliament, it needs formal approval by the Council of Ministers which is due to take place in July. Member States will then have two years to implement the new rules. In the meantime, retailers should be looking hard at their businesses and their return percentages and pricing models to see how the changes could affect them.

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at July 2011. Specific advice should be sought for specific cases; we cannot be held responsible for any action (or decision not to take action) made in reliance upon the content of this publication.

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