The Netherlands Authority for Consumers and Markets (ACM) will take action against online fashion stores that fail to refund, either in full or in a timely manner, consumers that cancel their purchases. Consumers that make online purchases are entitled to cancel their purchases within 14 days after receiving the product. Within 14 days after canceling the purchase, online stores must offer consumers a full reimbursement of the costs that consumers have paid for getting their products delivered. This includes shipping and handling fees. If consumers return only part of their orders, online stores are not required to reimburse these additional costs.
Anita Vegter, Member of the Board of ACM, explains: “The right to cancel one’s purchases free of charge is one of the fundamental principles of online shopping. Consumers must be able to rely on the fact that they get what they are entitled to. At the same time, businesses must comply with the rules, thereby creating a level playing field. That is why we are calling on everyone to submit any indications they might have about this issue.”
Focus on online fashion stores
Clothing and other fashion items are increasingly sold online. As the total amounts of such purchases are often relatively small, delivery costs make up a large share of the total amount. The rate of returned merchandise in the fashion industry is relatively high (35 percent). An ACM survey has revealed that more than half of all websites that sell clothes, shoes or accessories provide incorrect information about refunds in case of cancellation. The fact that refunds are an issue is confirmed by a study, which was released today by the Dutch Consumers’ Association, into the practices of online stores regarding refunds. Consumers that are not refunded the entire amount (or not in a timely manner) after cancelling their purchases are harmed considerably. Furthermore, this type of behavior constitutes unfair competition vis-à-vis online stores that do play by the rules. That is why ACM will take action against this type of behavior. The Dutch Consumers’ Association, Thuiswinkel Organisatie (the Dutch branch organization for firms that do business through distance selling) and the Foundation Webshop Trustmark all support ACM’s approach.
ACM’s approach in the fashion industry
ACM calls on businesses to submit any indications they might have about online fashion stores that fail to pay refunds, either in full or in a timely manner. Online retailers must make sure that the information about refunds on their websites is correct and complete. ACM will take action against online fashion stores that do not comply with these rules. Actions may include orders subject to periodic penalty payments or fines of up to EUR 450,000 per violation.
On ConsuWijzer.nl, ACM’s consumer information portal, consumers are able to submit any indications they might have concerning online stores that do not comply with the rules about refunds. Consumers can also find sample letters there if they wish to remind online stores about their rights.
Key rules regarding refunds when shopping online
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;
- 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.