Online Selling Law and Regulations

When you use a service like Amazon to sell online, there are regulations you should consider before you begin. As a seller, you need to be familiar with the law surrounding online selling and make sure you’re aware of what you need to do to sell legally. We’re going to break it down for you, in a few simple steps.

What you need to know

Before you start selling online, there are many things to consider. What you need to know depends heavily upon what kind of seller you’re going to be, and whether you’re just selling some unwanted clothing on eBay or planning on turning what you sell into a fully-fledged business.

Firstly, you need to know if you should be paying tax on the items you are selling. HM Revenue and Customs have created a very detailed document as part of their tax help series to help online sellers, which guides people through what is considered as trading, what taxes sellers may need to register for and how to do it.

The government have many useful resources online to help new sellers keep up with the law, and they also offer information about shipping overseas and setting up delivery and returns policies. We’ve listed some useful links over on our Sources for More Information page, so make sure you take a look for additional advice.

All sellers also need to consider Consumer Protection Laws and E-Commerce Regulations. We’ve gone into more detail about this later on, and we cover exactly what information sellers need to provide their customers with before a purchase and after.

Consumer Protection Laws

When you’re not meeting a customer face-to-face, particular rules apply to ensure your business transactions remain legal and your customer remains protected. Online selling shares many of the same laws as distance selling, with a few additional rules designed specifically for the web.

If you’re selling online, or from a distance in general, there’s a lot of information the government require sellers to provide to their customers before they purchase something.

Following the rules

First up, it’s very important that you make your business details visible and offer your customers a way to get in contact with you. If you have a VAT number, this should be given too. You should be easy to reach, and ideally offer customers more than one way to get in touch with you.

Keeping things clear

The price of your item, including taxes, must be made crystal clear and customers should be made aware of the various ways in which they can pay for an item. Details about the delivery of the item should be given before the item is purchased, including the various options offered, the cost and an estimate of how long each delivery should take.

When sending with CollectPlus, you can find out more information about delivery here.

Making amends

It shouldn’t be difficult for customers to change an order, and steps should be outlined by the seller to make this process easier. This should benefit sellers too, if you provide a restriction on how much time customers have to amend an order and give direct steps on how to alter it, any confusion should be avoided. If you choose to allow cancellations, a guide on how to do this should also be offered.

Always acknowledge

Once you receive an order online, you should aim to acknowledge the order and send an electronic receipt to your customer as quickly as you can. It can cause customers to worry if you don’t as they will need a copy of the receipt as proof in case something is wrong with the item or they wish to return it. If you do accept returns, you’ll need to write a clear return and refund policy too. Are you responsible for the cost of the return or is the customer? How many days do they have? All of these things should be included to avoid conflict.

You can include all of your details and policies, along with any extra information in your terms and conditions document. Customers should be able to save a copy of this too, so make it downloadable!

The CollectPlus returns service makes customer returns easy. Online sellers can send a returns label via email to their customer, who can then return their package at one of our many locations.

If you’re a customer and fall foul of faulty goods, credit card fraud or encounter any problems with an online trader, the government has compiled a helpful list of contacts that buyers can use to help them resolve their issues.

E-Commerce Regulations

If you’re selling items online, you’re going to be affected by the E-Commerce regulations. They came into action in 2002 and every commercial website is affected by them. Whether you have your own website, use eBay or Amazon, or even sell through a mobile phone or on digital television, the regulations will apply to you.

What this means

So what exactly are E-Commerce regulations? They overlap some of the UK’s distance laws, and you must provide the following information as a bare minimum. You must give the trading name of your company, an address from which you operate and an email address must be given. Using contact forms is not enough to abide to the regulations.

If you’re selling under a company name, a registration number and VAT number should be provided. Prices must also be clear, and no doubt should be cast. You should make sure your customer knows the final cost too, including tax and delivery.

Before customers make their order, sellers should define all the technical steps needed to complete the order, state whether the order will be filed by the service provider, and explain how to correct errors before placing an order. Terms and conditions should be downloadable so customers can store their own copy, too.

Receipts must be acknowledged quickly but sellers are allowed to say that orders are being processed rather than accepted if they state this in their terms and conditions.

The regulations also cover marketing techniques, so if you send customer emails or text messages to advertise products you should make it very clear that it is a form of commercial communication and outline any conditions if you’re sending them an offer or invitation to enter a competition.

There are many rules that apply to caching and hosting which, if applicable, can be found and read in detail in the official government legislation from 2002.

Sources for More Information

There’s a lot of information out there about getting started as a seller online. Depending on how many items you’re expecting to sell, and where you intend to send them to, a bit of additional research might be required to make sure you’re operating within the law.

The government’s website offers sellers a lot of advice concerning working for yourself, tax, registering for VAT and whether the income from your online sales will be taxable. It’s so easy to skip the legalities of online selling and dive straight in, but if you’re planning on doing it on a regular basis it’s important to do some background research first.

The government’s guide for sending goods abroad and advice on accepting returns and giving refunds to your customers may also be useful for sellers.

Not all sellers will be honest, and if you’re a customer who is thinking of purchasing an item online it’s important to be safe and avoid scams. Citizens Advice has put together some top tips for customers to help them avoid online scams, and Which? has a detailed guide designed for consumers who plan to shop online, taking readers through many online shopping dilemmas such as what to do if an order doesn’t arrive, how to complain about damaged goods and consumer rights during a sale.