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UK Distance Selling Regulations - they're going to put me out of business

9:07 am on May 19, 2009 (gmt 0)

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Under UK Distance Selling Regulations a customer has the right to cancel their contract and return goods up to seven working days after receipt beginning the day after they receive their goods.

The problem is I sell lingerie and every return I get has to then be sold as a used item at quite a loss by me as no way can I or would I sell worn items as new and this is when they can even be sold as sometimes they come back with labels removed or without packaging.

As an example a customer has just emailed me to say she wants to return £200 of goods as she "doesnt like them" and I have to accept the return and then maybe sell them for £40 total meaning I have lost over £100 and thats just in one order.

I understand the logic behind DSR but I cant keep doing this - due to competition I cant raise my prices to account for losses in returns otherwise I wont make a sale and Im legally bound to comply with the legislation but there really should be an exception for lingerie and other intimate items which cant be resold as new.

A lot of my competitors have in their terms and conditions that they dont accept returns unless faulty in blatant disregard of the law (not to mention not clearly showing shipping prices and not showing a company address and so on) but I choose to comply and end up losing out and potentially going out of business as a direct result. Fair, huh?

Sorry, rant over :(

9:17 am on May 19, 2009 (gmt 0)

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There might be a way around your problems:

The "guide for businesses on distance selling" says, that the customer has to take reasonable care about the products:
What constitutes reasonable care depends on a number of things. It
may be reasonable for the supplier to stipulate what they consider to
be reasonable care, such as not removing hygiene seals on garments
or only trying out shoes indoors. But these stipulations cannot restrict
a consumer’s reasonable opportunity to inspect and assess the
product. Consumers have the right to cancel even if they fail to take
reasonable care of the goods; however the DSRs do give suppliers a
right of action against consumers for breach of the statutory duty to
take reasonable care.

[oft.gov.uk...] (Page 24)

So if I understand this correctly - if you put the lingerie for example into a transparent bag, in a way that the customer can see and check the items and then seal the bag, you can refuse to refund the full amount and deduct the damage to the goods (new price - used price) if the seal is broken. Perhaps you should check with a lawyer and get some advice how this could be legally done.

10:46 am on May 19, 2009 (gmt 0)

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There's a bit Out Law [out-law.com] that might be interesting (although not particularly happy reading):

For sellers of intimate products: selling lingerie online can be a big commercial risk. There is a general exception to the right to cancel for those supplying goods "which by reason of their nature cannot be returned". But the OFT and DTI take the view that this exception only applies where "returning the goods is a physical impossibility or where they cannot be restored in the same physical state as they were supplied however they are cared for."

The guidance continues: "Thus while this exception may apply to items such as latex or nylon clothing which could become distorted once worn, we do not see the exception being applied to lingerie in general."

It acknowledges that hygiene concerns may prevent the reselling of such goods; but that, it seems, is the seller's tough luck. The Distance Selling Regulations "do not link cancellation rights with a supplier's ability to resell items as new," according to the guidance.

There is some comfort for e-tailers: a consumer has a duty to take reasonable care of goods, and the guidance says it may be reasonable for the supplier to guide the consumer on what is and is not reasonable care – such as not removing hygiene seals, "as long as these requirements are not so burdensome as to restrict a consumer's reasonable opportunityto assess the product."

1:54 pm on May 24, 2009 (gmt 0)

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Why not just "remanufacture" them by dry cleaning the items and repackaging?

I used to sell custom truck parts and we would take the return (usually dirty and scratched), blast the finish off of it and then refinish. Into a new box and it was "new" again. Total cost - about $5. The product was indistinguishable from the new product once the process was complete - even I couldn't tell the difference, and it was my company!

Granted truck parts and lingerie are different animals......

10:20 pm on May 24, 2009 (gmt 0)

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I have a simillar issue with my product. They are a "single use" glow product, so the customer can claim to say the item is faulty, or use the item then return it.
It all depends on the rate of returns you receive... if its only a small percentage then you should be ok.

In addition to that, the law also states that a company should not be put out of pocket if the customer is returning the item for no reason. To that end, telling customers they must pay for return postage, for credit card processing costs as well as the initial postage... they may be put off.

11:42 pm on June 2, 2009 (gmt 0)

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I don't get this - earrings and body jewellery appear to be exempt from return for reasons of hygiene under the Sale of Goods Act - why wouldn't lingerie be? I see that many shops that sell lingerie will not refund unless the goods are faulty, though I don't know if they are within the law or not.
7:36 am on June 3, 2009 (gmt 0)

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Hefty restocking fee?
8:22 am on June 3, 2009 (gmt 0)

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Hefty restocking fee?

8:27 am on June 3, 2009 (gmt 0)

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There is no legal way around it - it just really annoys me when so many of my competitors are blatantly ignoring the law and refusing to accept returns (according to their terms and conditions).
10:04 am on June 3, 2009 (gmt 0)

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Restocking fees are unlawful if it is a business - consumer transaction. B2B can do it.
2:23 pm on June 4, 2009 (gmt 0)

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The DSR is very vague about who is responsible for paying and arranging the return post.

I always tell my customers that, unless the item is faulty, they have to pay for and arrange the return postage. It's surprising how few people then bother to send stuff back.

But one thing I have learn in this business is that you will get some orders where you loose money - you just have to swallow it. It's the picture at the end of the year which is important. You will need to work out what % of orders get returned, and then factor that into your pricing in the first place.



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