To The Point of No Return
Return policies, online sales and eBay requirements
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All-inclusive return policies have become a standard part of online shopping. Companies such as John Lewis, ASOS and Currys offer full, free returns on their items (often with free courier pick up services), while others, such as Uniqlo, are offering a 60-day return window over the Christmas period.
It could be argued that these large companies have the resources to offer such a service, something small businesses simply cannot compete with. However, a comprehensive returns policy has become the mark of a quality seller and can have a positive impact on your customer service and sales.
In this article, we clue you up on all the dos and don’ts of returns and refunds, including laying out the relevant UK rules and regulations you legally have to abide by and how eBay encourages sellers to go beyond this.
“eBay found that items with a clear returns policy sell better than when these are unclear”
There are good reasons for having consumer-friendly return policies
Knowing it’ll be easy to send back an item if it’s not right can help take online shoppers over the threshold to clicking the “Buy Now” button. It encourages confidence in the seller and the product, and signals the seller’s understanding of consumer needs and their willingness to accommodate these.
It is no surprise then that eBay found that items with a clear returns policy sell better than when these are unclear.
What are the overarching legal requirements for online refunds and returns?
The most important legal regulations to be aware of are the Distance Selling Regulations (DSRs) that apply to online transactions and business sellers only. If you are both of these (and being a sole trader does count as a business seller) you legally must comply and offer what’s laid down in law.
The Buyer’s Rights To Return
The “cooling off” period
When selling any item online, the Distance Selling Regulations specify that a full refund (including the initial postage costs) must be issued when and if buyers request to return the purchased goods within 14 days of receiving them.
These 14 days after they have received the goods are seen as a “cooling off” period, whereby the buyer can decide whether they want to keep the item or not. Buyers don’t have to provide a reason for their return and should expect a refund within 14 days after the seller has received the item back.
Faulty / not as described items
For any items bought online, if they are faulty, not as described or expected, or unfit for purpose, sellers are obliged to refund the customer under the 2015 Consumer Rights Act. The customer is able to outright reject goods during this period if of sub-standard quality. This law also applies to second-hand goods but the burden of proof of a fault is on the consumer.
Do keep in mind that you may be able to consider applying a discount on this final refund if considerable use is evident. This is particularly relevant to any digital content. Any faults evident outside this 30-day period remain subject to the Sales of Goods Act that allows consumers to return items on the basis of faults. Sellers will need to act by either repairing, replacing, refunding or discounting the goods.
eBay’s own rules
As a professional seller on eBay, you will have certain extra obligations when it comes to refunds and returns to keep your customers and eBay satisfied to the highest standard:
You must specify a returns policy
This can be done in the “other details” section of the listing form. You must select whether you intend to accept returns or not and whether you will pay or the buyer will pay for returns postage. It’s good practice to make sure you clearly state all of this information before the sale takes place. This covers your own back if there are any unexpected issues.
You must specify a returns window
While the minimum legal requirement is 14 days in which the customer has a right to return the goods, eBay recommends you extend this window to 30 days. This allows shoppers more time to decide whether to keep the item and to make a return if necessary.
If the item isn’t as described or is faulty you are legally required to refund or exchange
As outlined, the law specifies a 30-day right to reject an item on the basis of a fault or unsatisfactory quality. It is also law that you must pay for all of the return postage in this instance so you may as well outline this in your returns policy.
“Make sure you keep tracking details and potentially check the condition of the item before it goes out to avert misuse.”
Understand that even if you specify “no returns accepted” you are still eligible to refund and return under the eBay Money Back Guarantee.
If a returns or refund dispute occurs due to the buyer claiming the item doesn’t match the item description or has not arrived, then you are bound by eBay to return the customers money through the eBay Money Back Guarantee. This applies even if you have specified you will not accept returns.
This policy does leave open the potential for abuse from dishonest customers, so make sure you keep track of the details of any such issues in case it becomes a pattern. You should also always check the condition of items before they go out so you can minimise the chances of legitimate issues with quality and condition.
eBay’s Managed Return Process - good for speedy business?
In 2015 eBay introduced the Managed Return Process, which, in theory, is a great idea. It can speed up your business processes and allow you to customise your returns policy.
For instance, if a customer isn’t satisfied with the t-shirt you have sent within the 14-day cooling off period, they can log onto their eBay account and request a refund from you. If you have customised your settings to automatically accept return and refund requests, this can be processed automatically without any actual contact with you. The customer can simply print a return postage label (which you can set as being charged to you) and return the item.
Sounds a perfect way to speed up your business and ensure customer satisfaction, right? We know this can be a bit of a minefield, as you may not know what you are getting back until you actually receive the item, by which time postage and the product costs may have already been refunded. However, if used carefully this approach can save you time and offer a faster, easier service to your customers.
If you are going to use the customisable returns system on eBay, just be mindful about the pros and cons. It may not be the best solution for high value, varied goods but can be a good option if your stock is mainly low value, similar goods with a large customer base.
eBay favouring the buyer - Scams and their outcomes
While it is important, as we have talked about, for eBay to protect the rights of its buyers, the automated systems that have become the norm for the online market place do not always play fair when it comes to specific cases of refunds and returns.
A spokesperson for eBay recently issued a statement in The Guardian:
“Under the current system, if something goes wrong within 30 days of the purchase, the buyer and seller between them have one week from the date of the buyer raising a case to work things out. Under the pilot system, if a seller requests it, we get involved immediately and have that conversation instead. We’ve also introduced a simpler system for the person who makes that decision – and photographic evidence is front and centre.”
So with this said, we have some tips on how to best work within the eBay system to avoid getting the short end of the stick.
- Don’t send money until you have inspected the item
- Evidence. Evidence. Evidence.
- Is that address legit?
Wherever possible when accepting returns, make sure you receive the item back and inspect it before issuing the buyer a refund. This may seem like an obvious one - but you’d be surprised how many people get caught out!
Unfortunately, sometimes eBay’s Money Back Guarantee has been shown to result in money automatically being taken out of your account after its systems have shown an item has been returned from the buyer (obviously there’s no way of proving if that item is legit). Being able to dispute this is becoming easier.
If your item’s worth it, track its postage. Being able to prove that an item has been delivered can be an invaluable piece of evidence in an eBay fraud case. Also, taking photographs of the packaging and the returned goods (if they are wrong or faulty) can help protect you from scams.
Be careful when sending an item to an address not listed as the primary address of the seller as they can claim they haven’t received the item. For instance, if a buyer messages you asking to send the item to a different address, you can ask them to add that address to their official eBay profile so you have proof you are sending it to the right place.
If you are unsure of something, good old customer interaction is key. It takes away the automation as much as possible, and hopefully means you can come to some sort of agreement with the buyer based on communication. And if that doesn’t work, don’t hesitate to contact eBay directly.
Making eBay returns and refunds work for you
When it comes to returns and refunds, it can be tricky to get the right balance between meeting your legal obligations and eBay best practices, keeping your customers happy and not leaving yourself open to abuse. However, get it right and you should see a measurable improvement in your online sales.
Keep in mind the points we’ve raised and you should be able to protect yourself from scammers while still offering a positive experience for customers that enhances your reputation and provides the best possible customer service.
Updated: 1st December 2016
For more hints and tips about selling smarter on eBay, take a look at our other articles and sign up to our newsletter to receive ListSmart’s latest news and articles straight to your inbox.