Consumer Rights Act: More transparency can help retailers as well as shoppers
Every retailer and online trader in the UK should have a huge red circle around 1 October on their office calendar.
That’s because next Thursday sees the start of what has been described by the Government as “the biggest shake-up in consumer rights law in a generation”.
The Consumer Rights Act 2015 will replace the Sale of Goods Act, the Unfair Terms in Consumer Contracts Regulations and the Supply of Goods and Services Act.
The Government says it will simplify, strengthen and modernise UK consumer legislation, and despite its fairly low-key introduction it’s going to have a significant impact on consumers and retailers alike.
The new legislation will cover everything from the return of faulty goods, to unfair contract terms and how refunds will be dealt with. It will also give more powers to trading standards officials to prosecute on behalf of consumers.
Which all sounds very dry, but there are several changes that will have a profound impact on how – and, potentially, where – shoppers buy their goods.
For example, for the first time consumers will have rights in law when they buy digital content – whether that’s a song purchased via Amazon, an app downloaded from Google Play or a film (I won’t use the word ‘movie’!) bought from iTunes.
If it’s not of the quality you have the right to expect, under this new law you can complain and get a refund. Not only that, if the downloaded content damages your smartphone, tablet or whatever, you will also have the right to be compensated.
The second big change is in creating a specific timeframe during which you can claim a refund for faulty goods. Until now it’s been defined only as a “reasonable” period. Now it’s 30 days, and retailers will lose the right to only repair or replace a faulty item. In addition, for everything but cars you’ll still be entitled to a full refund for up to six months if something goes wrong.
For consumers, the Consumer Rights Act 2015 should make it much easier to understand what they’re entitled to (or not) when something goes wrong. And the removal of some of those “grey” areas should make the complaints process easier to navigate.
For retailers of all shapes and sizes, the new legislation will have an even greater impact. Any UK business that sells to consumers could face claims from consumers, or prosecution from Trading Standards, if they fail to comply with the new regulations.
Contracts – including hire purchase and conditional sale agreements – will have to be clear, particularly when it comes to the price and any other charges. They will have to bring those charges to the customer’s attention, not simply rely on “well, it was in the contract, you should have read it”.
Businesses that don’t provide clear and accurate descriptions of their goods and services could find themselves seeing not only a big increase in refund claims, but also a wave of disgruntled customers taking to social media to vent their frustrations – their rights will be much clearer, and they won’t be slow to make them known…publicly.
But complying with the new legislation shouldn’t just involve retailers making contracts clearer and beefing up the complaints handling process; it should include a comprehensive critique of all forms of customer communications.
Any marketing messages or sales claims that could be seen as misleading may result in an increase in consumer complaints, a loss of business and a lasting impact on the brand’s reputation.
That’s why all traders – offline and online – need to be reviewing their marketing and sales processes, including sales brochures, promotional literature, advertising and websites.
There will also be a need for increased vigilance over PR and social media, particularly where the content is promotional in nature or features information about the product or pricing that isn’t consistent with the consumer experience.
Retailers who think their contracts and sales materials are already clear and consistent should ensure they’ve properly road-tested those materials against the new legislation. Ideally that should be with groups of consumers, but so long as it’s an objective, external review it should at least identify any potential pitfalls.
But although there’s potentially a lot of work that retailers need to do to ensure they’re compliant (and law firms haven’t been slow to offer their services in this regard) the CRA also creates a marketing opportunity – particularly for those selling digital content.
Any shoppers who, until now, have been reluctant to download a music track, film, e-book or app because of the perceived lack of consumer protection versus a physical product will be reassured that their purchases now come with the same rights of redress.
That gives reputable online retailers the opportunity to strengthen their consumer messages – and drive more traffic away from the high street – and at the same time help push the unscrupulous traders out of the market.
The Government’s intention may be to enhance consumer protection and force businesses to be more transparent, but that increased transparency doesn’t have to be a burden for retailers. Those that see it as an opportunity can also seize a competitive advantage.