Welcome to the November edition of Crab Insight
We are well into the season of mist and mellow fruitfulness so beloved of John Keats. In business, we are contemplating the coming winter but we would like you to invite you to have comfort in the knowledge of what your customer’s cancellation rights are when buying a product or service – that’s our focus for the month along with returns and complaints!
Claudia Crab’s November Focus
Cancellations, returns and complaints.
“Don’t get caught out. Put in place clear policies and procedures so you are not sidetracked or have to firefight things on the back foot.” Robert Briggs – Compliance Director Crimson Crab
It is important to differentiate between cancelling a contract and terminating a contract. Cancellation refers to ending a contract in circumstances set out in the contract or implied into the contract by legislation.
You need to know when a purchaser has cancellation rights and provide the necessary information and the correct documentation at the right time, particularly when the purchaser is a consumer as they have clear rights and there are legal sanctions if you get it wrong.
There are three sets of circumstances where the parties to a contract have cancellation rights.
- Contractual cancellation rights i.e. those given in the wording of the contract (terms and conditions or agreement) itself.
- Those given by the Consumer Contracts Regulations 2013 when making sales to a consumer (an individual acting for purposes which are wholly or mainly outside that individual’s trade, business, craft or profession) away from trade premises (e.g. in the consumers home or at a trade fair) or remotely (e.g. online)
- Where credit is being provided and the customer is an individual consumer, a sole trader or a partnership of three or fewer people.
If you are selling on line to consumers then you need to think about returns.
Your guarantee or returns policy should meet legal requirements and not be open to abuse.
Under the Consumer Rights Act, consumers can return items which are faulty (and in certain other circumstances).
If the return is for this reason then you will have to reimburse the shipping costs (in and out) as well as the purchase price.
On the other hand, if the consumer is exercising their right to cancel the contract if you haven’t told them that they need to pay return postage it will be down to you.
Your policy, procedures and processes for dealing with complaints should support your long-term business goals and provide for continuous business improvement.
Again you need to think about compliance with any rules specific to your industry or more widely.
Finally you need to consider alternative dispute resolution or ADR and how that will impact your complaints process.
Top tip – A great starting point to find out where you are, is our Business MOT
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Friday 13 November 2020
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