Selling online to consumers: the right to cancel

If you are a business selling goods, services, or digital content (music, films, software, ebooks and information, and so on) online to consumers in the UK, you'll want to know when and how consumers can cancel their contract with you.

Who is a consumer?

These rules apply to sales by a business to any "individual acting for purposes which are wholly or mainly outside that individual's trade, business, craft or profession".

If someone is buying goods for their business, these rules do not apply.

Situations when the rules do not apply

I know it's a bit odd to start by saying when something doesn't apply, but it makes sense to outline here that the rules in this blogpost do not apply to certain types of contracts, goods, and services.

The exceptions I see most commonly (there are others) cover:

  • passenger transport services
  • goods made to the customer's specification or which are clearly personalised
  • goods which are liable to deteriorate or expire rapidly (e.g. some foods)
  • supply of accommodation, goods transportation, catering, or services relating to leisure activities if the contract provides for a specific date or period of performance

The rules also cease to apply:

  • if you supply sealed goods which are not suitable for return due to health protection or hygiene reasons, if they become unsealed after delivery
  • sealed audio or video recordings or software, if they become unsealed after delivery
  • anything which gets "mixed inseparably" with other items after delivery.

(Note that you do not have to show that the buyer did these things — only that they have happened.)

The cancellation period

The general rule is that the consumer may cancel at any point within the cancellation period without giving a reason, and without incurring any liability.

This does not stop them, or you, cancelling at any point before the contract is entered into.

The cancellation period begins when the contract is entered into. For simplicity, I'll call this the "start date" for the rest of the post.

If you have provided the consumer with all necessary information before they are bound by the contract

If you have provided the consumer with all necessary information before they are bound by the contract, the cancellation period is 14 days long:, but when it starts varies a bit:

  • service contract, or supply of digital content: 14 days after the start date
  • sales contract:
    • single goods: 14 days after the day on which the goods come into the physical possession of the consumer
    • multiple goods / pieces: 14 days after the day on which the last of the goods or pieces comes into the physical possession of the consumer

If you have not provided all necessary information before they are bound by the contract

If you have not provided all necessary information before they are bound by the contract, the cancellation period is different (and generally worse for you):

  • if you provide the information within 12 months of the start date, it ends at the end of 14 days after the consumer receives the information
  • otherwise, the cancellation period ends at the end of 12 months after the day on which it would otherwise have ended if you had provided the information correctly

Providing services or digital content during the cancellation period requires express consent

You must not begin to supply services or digital content during the cancellation period unless the consumer has made an express request for this.

If you want to offer to supply services or digital content within the cancellation period, collect evidence of:

  • the consumer's express request; and
  • their acknowledgement that they will lose their right to cancel once the services have been fully performed.

The consumer loses their right to cancel once the service has been full performed or the supply of digital content has begun.

How a consumer can exercise their right to cancel

To cancel a contract, the consumer has to tell you that that is what they are doing. They can either send you a specific form of wording, or else give you any other clear statement telling you that they are cancelling.

You cannot insist on them using any particular method of cancelation. If you offer an online form, it is not mandatory, but if a consumer does use it, you have to acknowledge receipt without delay.

If a consumer sends you a message during the cancellation period, telling you that they want to cancel, this is a valid exercise of the right to cancel even if you do not receive it until after the cancellation period: it is deemed cancelled when sent. It is, however, up to the consumer to show that they sent you the message saying that they want to cancel during the cancellation period.

The effect of cancellation

If a consumer cancels their contract, each party's obligations come to an end.

Reimbursement

You must reimburse:

  • all payments, other than payments for delivery
    • you can withhold an amount equivalent to the loss in value of goods, if they caused that loss of value by handling the goods beyond what is necessary to establish the nature, characteristics and functioning of them (e.g. beyond what might reasonably be allowed in a shop), but only if you provided them with the necessary information about their right to cancel
  • payment for delivery
    • unless they chose a kind of delivery costing more than the least expensive common and generally acceptable kind of delivery you offer, in which case you must reimburse what they would have paid if they had picked that option

You must reimburse them without undue delay and, in any case, no later than:

  • if the contract is for sale of goods and you have not offered to collect them, 14 days after the earlier of:
    • the day on which you get them back, and
    • the day on which they show you evidence that they have sent them back.
  • otherwise, 14 days after the day on which you are informed of their decision to cancel.

You must reimburse them using the same means of payment that they used initially, unless they expressly agree otherwise.

You cannot charge a fee for reimbursement.

Getting your goods back

If you have offered to collect the goods, you are responsible for doing so.

If not, the consumer has to send them back or return them to you. They must do this without undue and, in any event, not later than 14 days after the day on which they cancel.

If you have specified an address, they have to return the goods to that address, but otherwise they can use any address you've told them to use for contact / communication purposes, or, if none, any of your places of business. So if you want returns to go to a particular place, you must tell them.

The consumer has to pay the direct costs of returning the goods, unless:

  • you have said you will; or
  • you haven't provided the necessary information about their right to cancel, in which case you are contractually required to pay the costs of return.