ACM: reminding online fashion stores of refund rules has produced a positive result

Hundreds of online fashion stores have adjusted the information on their websites regarding refunds in case of cancellation in response to actions taken by the Netherlands Authority for Consumers and Markets (ACM). Following an investigation of its own, ACM notified online fashion stores that they failed to inform consumers properly about the rules regarding refunds in case of cancellation. Anita Vegter, Member of the Board of ACM, explains: “When consumers return their purchased items, online stores must refund them in full and in a timely manner. They also need to inform consumers properly about these rules. Consumers will then be able to make well-informed decisions, and it will create a level playing field for businesses.”

Clothing and other fashion items are increasingly sold online. The rate of returned fashion items is relatively high (35 percent). In part because of a survey of the Dutch Consumers’ Association, ACM announced in late-2014 it would keep an eye on refunds in case of cancellation with online fashion stores. In June 2014, the rules on refunds in case of cancellation were tightened, as well as the requirement for providing information on websites.

ACM has looked into the information about refund policies of online fashion stores
ACM has assessed whether online fashion stores that are members of Thuiswinkel Organisatie (the Dutch branch organization for firms that do business through distance selling) and the Foundation Webshop Trustmark (in Dutch: Stichting Webshop Keurmerk) comply with the rules on refunds. In addition, ACM has investigated online stores with high turnovers, online stores with brick-and-mortar locations, and online stores about which consumer information portal ConsuWijzer has received a lot of reports. It turned out that there is much room for improvement regarding the refund information that online stores provide. More than half of the investigated stores gave incorrect or incomplete information about full refunds, and approximately 85 percent of the online stores gave consumers incorrect information about the refund period.

Warnings issued to member stores and other online fashion stores
ACM informed Thuiswinkel and Stichting Webshop Keurmerk of its findings, and gave them the opportunity to put the affairs of over 600 of their members right by themselves. Both of these organizations seized this opportunity with both hands. All of the members that have been approached currently use the correct terms and conditions. And based on a sample survey, it turns out that the information on websites has vastly improved as well. Furthermore, ACM recently contacted 40 large and smaller online stores that are not members of either of the abovementioned associations, and notified them of their websites’ displaying incorrect information on refunds. These online stores have promised to adjust their websites and procedures soon.

In the near future, ACM will begin enforcing the rules, and it will take action against online stores that still inform consumers incorrectly about refunds, or stores that fail to comply with the rules in practice. They risk being imposed orders subject to periodic penalty payments or fines of up to EUR 450,000 per violation.

Key rules regarding refunds when shopping online
Consumers that make online purchases are entitled to cancel their purchases within 14 days after receiving the product. When cancelling one’s entire purchase, the following refund rules apply, among other rules:
• Online stores must refund consumers that cancel their purchases the entire amount within 14 days;
• Online stores must refund all payments made by consumers, including shipping costs or any other additional costs. They cannot say on their websites that only the purchase amount will be refunded. When only a part of the purchase is cancelled, online stores are not required to refund the shipping costs or any other additional costs;
• Consumers only need to pay the shipping costs for returning the merchandise if this has been communicated beforehand;
• When paying a refund to a consumer, the online store must use the same payment method as the consumer used when purchasing the merchandise. For example, online stores can only give a voucher as a refund if the consumer had paid with a voucher in the original transaction;
• On their websites, online stores must provide consumers with clear and correct information about these rules.

More information about refund rules in case of cancellations (in Dutch)
• The official rules about cooling-off periods explained for online stores
• Information for consumers about their rights when shopping online