WHEN LESS IS MORE - HOLIDAY SALES FROM LEGAL ASPECT

17 December 2018

The Christmas shopping fever began with Black Friday in late November, and not only the buyers are trying to exploit this period of discounts, but also the sellers. During this season the Competition Authority is also curious about the incredible sales and should they find any breach, their “surprise” to the seller will be a fine of ten millions of HUF. During the inspections of recent years, big companies have been caught in the authority's net such as Extreme Digital, Media Markt, Alzo or Lidl. If you are a seller or operate an e-shop, it is as easy to slip into a legal pitfall as slipping on ice. That's why we've collected the most important rules for discounts attracting customers and how to operate a compliant e-shop. Thus, you can avoid paying your end-of-year earnings to the Competition Authority.

Deceptive offers

The Authority pointed out that consumers are pre-planning their higher-value purchases and their decision making can be heavily influenced by promising various savings. The purchase is often done because the buyers feel that they are making an advantageous deal and saving money.

During the Black Friday and the holiday season, shops can offer up to 70-90% discounts. It is a common trick that the product subject to the discount has never been sold for the price indicated as the price before the drop. In such cases, before the sale, the price is increased to its multiple for a short time, so after the drop the discount can be 70%, but the saving of the buyer is nowhere near.

It is considered as unfair commercial practice according to the law, when, the consumer cannot actually achieve the promised amount of savings during a sale, as a result of the non-promotional price was not used previously by the seller.

In their procedure against Media Markt, the Competition Authority stated that it is also an unfair practice if the store can only offer the discounted product in limited quantities compared to the foreseeable demand, so, after scrolling through the web-shop, it turns out that the selected products are already sold out. Indicating the phrase "while stock lasts" does not exclude the infringement, which was discovered after the Authority had fined Lidl in connection with above.

It is also an unfair commercial practice, if, in the case of a generally announced sale, the offer actually applies only to a small range of the products. General discounts must cover at least 10% of all products in the store, based on GVH's practice, which is known from the procedure against Extreme Digital.

Know the rights of the consumers!

In case of shopping online, the consumer is more vulnerable than when they walk to the store to pick the gifts, despite the freezing cold. In e-shops customers cannot see the goods in "life size" and often it is difficult to identify the company behind an e-shop. In the following we summarize the rights of the consumers in the case of online shopping.

Before purchase

By law, you shall inform consumers about the steps of the electronic contracting, the technical possibilities to correct data entry errors, the 48-hour confirmation, the formalities of the contract, the terms of performance, the complaint handling procedure, the conciliation body, the online dispute resolution platform, product liability, warranty, and right of withdrawal. It is also mandatory to indicate the details and address of the company operating the shop on the website, as it makes quite a difference if the consumer has to return a defective treadmill to Hungarian address or to China. Additionally, the GTC shall be available in downloadable form.

The price of the product must be indicated so that consumers can see whether VAT is included and indicate any additional costs incurred by the buyer (eg choosing another colour, packaging, delivery).

The order button, which results in the conclusion of the contract shall be designed to make it clear that by pressing the button the buyer orders the products and payment obligation arises.

After purchase

The most important right a consumer can exercise in nearly every online shopping is the right of withdrawal. After purchasing, consumers may withdraw within 14 days of receipt of the product, not only in case of defective products, even if the ordered clothes are too large or they simply do not like them.

In such a case, the consumer must return the product at their own expense, once this happens, as a seller you shall return the purchase price of the product and other costs to the buyer.

Furthermore, the buyer is not obligated to pay for extra costs at delivery, of which he has not been properly informed in advance.

(This does not apply to the customs, as a web shop operator you should inform the buyers that the cost of the customs to be borne by them.)

In the light of the above, you can assess whether your store meets the most important requirements. If the penalty is not enough deterrent, please also note that Consumer Protection Authority keeps a blacklist of infringing web shops, which is also available on their website. After all, we can convert the known saying to that less "tricking" means more earnings!