With a draft bill now in the final stages of pre-legislative scrutiny it is likely to only be a matter of months before the new Consumer Rights Bill comes into force in the UK. If you are selling products to consumers in this market, now is the time to assess how your existing procedures and policies may need to be adjusted as a result.
For decades the European Union has been legislating in favour of consumers and has published – and continues to amend – several directives aimed at protecting them. The UK has long been a champion of consumer rights, – not just by law but also on a voluntary and commercial basis, and has one of the most pro-consumer market environments in the Union.
The legacy is that UK consumer law is currently somewhat dated and finds its source in no less than a dozen different texts, leading to confusion for companies and consumers alike. To solve this problem, the Department for Business has started the process of simplifying, merging and enhancing most regulations into one text known as ‘the UK Consumer Rights Bill’.
So, what are the main changes in this bill and what impact can you expect?
In the context of the sale of goods to consumers (*) the main suggested changes can be summarised as follows:
Consumers would have statutory rights for the goods (and digital content they may include) to be:
- of satisfactory quality
- fit for particular purpose
- as described, or match a sample or model seen or examined
- installed correctly (where installation is part of the contract)
In case the above statutory rights are not met, consumers would have the right to enforce one of the following remedies:
- 30-day short-term right to reject
Unless you plan to legally challenge any customer who claims within 30 days of purchasing a product you sold did not meet his/her expectations – and probably ensure he/she never buys from you again in the process – this practically means that the 30 day ‘no questions asked’ return policies would become a ‘legal standard’. The good news is these generous return policies are already pervasive in the UK retail landscape, so chances are you would not have to adjust much, apart perhaps from reviewing your pre-contract information (and advertisements) to ensure they do not overstate any aspect of the product or expectations from this product.
- Right to repair or replacement
It is still unclear how this change will practically impact goods already covered by the EU warranty legislation, if at all. What it may require though, is a careful communication to the consumer of a product’s realistic performance expectation over time as well as its intended use. For example, ‘managing expectations’ on battery performance would become critical otherwise consumers could be entitled (statutory rights) to claim non-conformity and request one of the appropriate remedies.
- Right to price reduction or final right to reject
The most notable change here is probably the fact that the trader could only be given one opportunity to bring the product back to conformity (e.g. repair), after which the consumer would be entitled to either ask for a price reduction or reject the product and claim a full refund. It remains to be seen how consumers would exercise this right although there are some increased expectations to explain such rights more clearly and directly to the consumer, but it will no doubt impact the way this exposure might be accounted for in the future. Expect more scrutiny on what the industry refers to as overall ‘return rate’.
All in all, it seems like this bill will deliver better clarity while giving consumers stronger rights and more options. This is probably a good thing for all of us. Based on this draft and given the current pro-consumer environment in place in the UK today, potential changes would appear to be subtle and as such would not be expected to have any major impact on B2C suppliers. Customer’s policies and sales contract’s terms and conditions will probably have to be adjusted, and it would also be wise to review pre-sale consumer information. Your customer service staff will also need to be specifically trained.
Policies on after sales service options could be affected in a number of ways. Iit may make sense to have clearer, more straightforward swap out policies in place which would lead to increased swap stock being more generally available. As well as affecting inventory levels, this could also mean a higher refurbishment specification of returned product as cosmetic conformity will be more important than a same unit repair and return model. Companies will no doubt place even greater emphasis on accelerating the development of their returns avoidance strategies investing more into self-help and remote support services. All of this in a bid to keep their customers happy with a positive experience through the continued use of their products in a market environment of increasing choice.
One thing is certain: it always makes business sense to reduce returns and bounce rates therefore there is no need to wait until the law is passed to tackle these issues.
Xavier Hubert, Teleplan
(*)Note: the bill also addresses the supply of services, digital content and other hire purchase transactions
