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6. Returns and reimbursement

One of the key elements of consumer protection when shopping online across borders is the possibility to return the product and receive a refund based on the cooling-off period as well as to be duly reimbursed if the product is not delivered. That is why the right of withdrawal, the so-called cooling-off period, is of utmost importance for consumers in online cross-border shopping.

The Distance Selling Directive[68] provides rules to protect consumers in such circumstances: the right of withdrawal and the conditions for exercising this right as well as the trader’s obligation to provide written information on both[69].

6.1. Conditions and procedures for exercising the right of withdrawal

6.1.1. Information on return procedures

The Distance Selling Directive stipulates that written information on the conditions and procedures for exercising the right of withdrawal must be provided. In order to evaluate how the traders comply with the Directive, the websites were checked for those conditions and procedures. In addition, the Mystery Shoppers also searched for the availability of a customer service and the means of contact offered as well as whether there were any illegal restrictions on returns.

The mystery shopping exercise revealed a negative performance regarding the availability of information on return procedures. 15% of the traders did not offer any information at all. 15% of those who did provide information did not display the information in the same language as the purchase was conducted in. This effectively means that the information was unavailable. The Mystery Shopping exercise also revealed that when the information on the conditions and procedures for exercising the right of withdrawal was given, it was not always clear and concise.

Consumers should be given clear information on the procedures for returning goods, both on the websites and on a durable medium. According to the Distance Selling Directive consumers should receive this information “prior to the conclusion” of the purchase and the consumer should also receive written confirmation or confirmation in another durable medium “[…] in good time during the performance of the contract, and at the latest at the time of delivery […], unless the information has already been given to the consumer prior to conclusion of the contract in writing or on another durable medium available and accessible to him”. As shown in Fig. 25, the information offered by traders was more often available on the websites than provided in a durable medium. Ideally the consumer should receive the information in a durable medium when the product is delivered. This would reassure the consumer of the possibility of returning the product and getting reimbursement.

Fig. 25 Information on return procedure
Fig. 25 Information on return procedure

According to the 2003 report[70], 36% of the deliveries received contained information on the return procedures, which is a higher percentage than has been observed in the present shopping exercise. It seems that the traders prefer to display the information on their websites, leaving it to the consumers to download/copy this information. In cases where such information is not available, the consumer have a right to believe that the product can just be returned to the address given on the website or on the package received within the time limit.

As mentioned in section 4.1. (“General information”), it is always important that contact information is available to the consumer. The importance is further emphasized when some traders state in their terms and conditions that consumers need to contact the trader when exercising the right to withdraw. Customer service or at least an e-mail or a contact form as means of contact with the trader were available in nearly all the websites as shown in Fig. 26. The contact form was used to contact the trader only in a very few cases (72 traders were contacted using the contact form) and in 53% of these contacts, a receipt of the submission and/or a confirmation email, including the query, was not received, which may be seen as a low performance of the traders offering this mean of contact.

Fig. 26 Contact information available
Fig. 26 Contact information available

6.1.2. Restrictions on returns

Some illegal restrictions on return were found:

6.2. Returning products to test the right of withdrawal in practice

All products received were returned using the right of withdrawal within a period of at least seven working days and without giving a reason[74]. However, some traders requested to be previously contacted and provided return codes. One in three traders asked to be given a reason for the withdrawal, which can be deemed illegal and turns out to be a higher percentage than in the 2003 report[75] (24%).

Some Mystery Shoppers faced difficulties returning the products under the right of withdrawal either due to a lack of adequate and clear information or because, after contacting the trader, the procedures to be followed were too complicated or expensive. These effectively deter the consumer from exercising his or her right to withdraw. This was for example the case when the traders requested that a specific method of return be used instead of the standard postal service, e.g. an Austrian trader who requested that the product be returned with a specific courier, which would have cost almost the same as the price of the product[76].

Another aspect of the issue was experienced when it was noted that a package containing the returned product was taking an unexpectedly and unusually long time to reach the trader. This was the case for an Austrian Mystery Shopper who returned a product to a trader in Italy which took 57 days to arrive at the trader’s office in Bolzano. Such long delays cause uncertainty and can cause financial loss for consumers, because the reimbursement of the purchase price is also delayed.

6.2.1. Reimbursements

Article 7 of the Distance Selling Directive[77] stipulates that if ordered goods are not delivered, consumers are entitled to obtain a refund of any sums they have paid. Fig. 27 below illustrate how this rule was observed by the traders in this shopping exercise. It shows that in only 3% of the purchases, products were not delivered and were not reimbursed either[78]. On the other hand, it also shows that 85% of the products received and returned were reimbursed, although a full amount of reimbursement was not received in all cases as explained in the following section.

Fig. 27 Reimbursements of all purchases
Fig. 27 Reimbursements of all purchases

Article 6 of the Distance Selling Directive establishes that where the right of withdrawal has been exercised by the consumer, the supplier is obliged to reimburse the sums paid by the consumer. The conclusion from Fig. 28 below is that reimbursement was received for 90% of the products returned. This rate is higher than observed in 2003[79] (68.5%), thus leading to the conclusion that improvements have been achieved in this area.

Fig. 28 Reimbursements of products returned
Fig. 28 Reimbursements of products returned

This mystery shopping exercise revealed that there are still some traders in the e-commerce sector who ignore the relevant provisions of the Directive, as was the case of a Spanish trader who explained the decision not to reimburse the Mystery Shopper in the following terms: “We have received your return but must inform you that you are not entitled to a refund on the following two counts. There is no EU norm on a ‘cooling-off’ period and the present practice in Spain is seven days. The total value of you [sic] purchase is less than€60 (excluding postage) and does not, therefore, qualify for the consideration above.”

According to the law of some EU countries, consumers are also entitled to a reimbursement of the return costs when exercising their right of withdrawal. This is the case in Finland[80], Germany[81], Greece and Lithuania.

6.2.2. Reimbursement of delivery costs

The reimbursements received were not always in compliance with the Distance Selling Directive[82]. In the majority of returns, the amount reimbursed was not the total amount the Mystery Shopper paid, which means that most of the traders did not reimburse delivery costs and in some cases even after being requested to do so according to the law. For instance, this was the case with a Lithuanian trader and a British trader. The full amount reimbursement rate observed in this shopping exercise was lower than that observed in 2003[83] (43% and 53%, respectively).

Some traders agreed to reimburse the delivery costs after the Mystery shopper reminded them of their legal obligation. This was, for example, the case with two Irish traders, one British trader and one Cypriot trader, who immediately informed the Mystery Shopper that they would also reimburse the delivery costs after receiving a reminder from the Mystery Shopper.

One Norwegian Mystery Shopper was not that lucky. The Mystery Shopper received only reimbursement for the product purchased, not the delivery costs. After reminding the French trader of the obligations according to the EU-legislation, the trader responded “[...] Our return policy is available here: [link to terms and conditions provided]. It is in French, but it explains that when you are returning a product a customer can not [sic] claim back the shipping cost. Moreover, Norway is not part of the European Union...”.

Fig. 29 Amount of reimbursement
Fig. 29 Amount of reimbursement

In almost all cases, no reason was given why the traders did not reimburse the full amount paid. In general, the very few answers given by traders stated only that they do not reimburse handling and delivery costs or that they cannot accept withdrawals. Similar statements were also found in some terms and conditions displayed in the websites. One example is the case of a Polish trader who claimed that “no refund of shipping” was included in their terms and conditions and they therefore “have no obligation to refund the shipping cost”.

As mentioned above, reminders were sent to the traders. In some cases the traders immediately replied back with an excuse and informed that they would issue the reimbursement of delivery costs right away. However, the share of traders who did not respond to the reminders or did not respond positively was by far the largest.

Other than the cases where delivery costs were not reimbursed, some Mystery Shoppers also incurred charges they could not foresee when buying the product, such as those related to currency exchange differences and bank fees for payment of purchases made to traders outside the euro area which did not accept payments in euros[84].

6.2.3. Reimbursement time

According to the Distance Selling Directive[85], traders must reimburse consumers of the sums they are entitled to within a time limit of no more than 30 days after receiving the products returned by consumers and at no charge to the consumers.

Fig. 30 below shows that 46% of the reimbursements were received within 7-14 days as opposed to the 60% of the 2003 report[86] for the same period. Fig. 30 also shows that 10% of the reimbursements took place after 30 days. In this group of cases, the time spent by traders to reimburse Mystery Shoppers ranged from 31 days to 66 days, as was the case of an Italian trader reimbursing a Finnish Mystery Shopper. Some of these cases were also related to traders arguing that they did not receive the product returned and only after several attempts did they finally pay the reimbursement.

The reimbursements made in less than one day were related to the fact that the date of reimbursement on the credit card statement was the same as the date of purchase or the date of payment, which does not allow a clear understanding of which was the exact period of time spent to reimburse the Mystery Shopper.

Fig. 30 Days between return & reimbursement
Fig. 30 Days between return & reimbursement

Without considering the extreme limits in the chart (‹1 day and ›30 days)[87], the average time to reimburse resulting from this shopping exercise was 14 days. In the 2003 report[88]the upper extreme was included, which gave an average time of 13 days. If we had used this method here our average would be higher than the quoted 14 days.

6.2.4. Means of reimbursement

As shown in Fig. 31 below, almost all reimbursements were carried out by crediting the credit card used to pay for the purchase, while bank transfer was used by the trader only in a very few cases. The trader did not charge any fees for reimbursement.

There were two cases of reimbursement by means of a voucher instead of money, which can be considered negative for consumers if they do not want to keep using such traders for further purchases. This is also not in accordance with the Distance Selling Directive[89]. In one of these cases, the terms and conditions of the trader stated that the price of the product would only be reimbursed with a voucher and if the costumer chooses another product at a later stage, the delivery costs would be covered by the trader.

Fig. 31 Means of reimbursement
Fig. 31 Means of reimbursement

[68] Directive 97/7/EC of the European Parliament and of the Council of 20 May 1997 on the protection of consumers in respect of distance contracts.

[69] Article 5, 6 and 7 of the Distance Selling Directive (97/7/EC).

[70] Cf. the 2003 report, p.15 (see footnote 1).

[71] The purchase was also referred to in section 4.5.2. “Right of withdrawal”.

[72] Ibid.

[73] The purchase was also referred to in section 6.2.1. “Reimbursements”.

[74] Note: In some of the cases where a reason was asked for on a return slip, it did not appear to be a condition from the trader. In some cases, it can also be regarded as positive if the trader asks for a reason, as it may represent a wish from the trader to improve the website or the products sold.

[75] Cf. the 2003 report, p. 13 (see footnote 1).

[76] This case is discussed in more detail in section 6.1.2. ”Restrictions on returns”.

[77] Directive 97/7/EC of the European Parliament and of the Council of 20 May 1997 on the protection of consumers in respect of distance contracts.

[78] Note:The values in Fig. 27 were rounded off from 3.3% and 2.6%, respectively, which explains why the small pie is not cut into equal sizes.

[79] Cf. the 2003 report, p. 13 (see footnote 1).

[80] If possible to return by standard post.

[81] The principle applied in Germany, is the return costs to be paid by the trader. However, the regular costs of return shipment may be imposed by contract on the consumer if the price of the goods being sent back does not exceed an amount of EUR 40 or if, where the price is higher, the consumer has, at the date of the revocation, not yet rendered consideration or given a partial payment, unless the goods supplied do not correspond to those ordered.

[82] Directive 97/7/EC of the European Parliament and of the Council of 20 May 1997 on the protection of consumers in respect of distance contracts.

[83] Cf. the 2003-report, p. 14 (see footnote 1).

[84] Please see section 5.3.3. “Unexpected costs".

[85] Directive 97/7/EC of the European Parliament and of the Council of 20 May 1997 on the protection of consumers in respect of distance contracts.

[86] Cf. the 2003 report, p. 14 (see footnote 1).

[87] Note:The extreme limits were not taken into consideration because of the reason stated above regarding the cases with less than one day and also because the time limit given in the Directive is 30 days. This results in an average reference for those traders reimbursing within the legal time limit.

[88] Cf. the 2003 report, p.14 (see footnote 1).

[89] Directive 97/7/EC of the European Parliament and of the Council of 20 May 1997 on the protection of consumers in respect of distance contracts.

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This page forms part of the publication "ONLINE CROSS-BORDER MYSTERY SHOPPING – STATE OF THE e-UNION" as chapter 5 of 8.
– STATE OF THE e-UNION" as the preface.
– STATE OF THE e-UNION" as appendix -3.
Version no. 1.0, 2011-08-31
© The Competition and Consumer Authority