20 March 2019

The European Commission makes a thorough investigation on a particular field from a consumer protection view, and issues a report about the results. Topics like airlines, electronic devices and consumer loans have already been discussed before. This time the report is made on online shopping, that can be useful for those who run an online store. In our current article we will introduce you three things to avoid when you operate an online shop.

Hidden costs

The Commission has found consumer protection problems in more than the half of the cases, that was mostly related to the indication of the prices.

The European Commission aims to block the widespread practice that enforces consumers to pay a higher purchase price than originally intended by applying hidden costs.

According to the Hungarian consumer protection act based on the directives of the European Union, the selling price and the unit price must be unambiguous, easily identifiable and clearly legible, and it must also include value added tax and any other taxes.

If a website indicates a price that increases during the purchase by adding several hidden costs (for example administration fee, compulsory insurance, shipping fee, etc.) that the buyer cannot see beforehand does not meet the above mentioned expectations.

Discount, sale

There is a further criteria related to the prices, that you are not allowed to use fake discounts on your website, and you have to make it clear how the discounts are calculated.

Only using marketing slogans like “discount” or “sale” or “last minute” for the casual prices without any decreasing is misleading, because in fact there is no discount at all, so business practices like this is not lawful.

31% of the websites offering discounts were suspicious for the Commission that they announce fake discounts, and further investigation will be made in such cases.

Insufficient information

Online shops have to provide information for the consumers, that is often lacking some important elements such as below:

Online dispute resolution

According to the European legislation, online shops must indicate a link on their website redirecting the consumers to the platform of online dispute resolution, and it must be easily accessible.

Unfortunately, the Commission has the experience that in most cases the websites do not fulfil this obligation, even the fact that it could be also beneficial to the operator of the online shop as well, because it would make it possible to resolve the conflicts without going to the court.

14 days’ right to withdrawal

Meeting the expectations of the European Union, the Hungarian law provides a withdrawal period to the consumers with 14 days. This means that the customer has 14 days to decide whether he is satisfied with the product or he would rather not buy it.

As the customer doesn’t need to give a reason to the withdrawal, this is a big risk to the seller, as withdrawals without any reason can cause problems in the business operation. This is why it is easier for the sellers not to give information about the consumers’ rights.

However, providing information is a must, and if you miss it, the withdrawal period increases with 12 months. That is why it is better to follow the lawful way, and inform the customers about the withdrawal right. It might be inconvenient to have 14 days’ period of uncertainty, but 12 months can cause much bigger troubles in the operation of your company.

Identification and contact

The information must also include who you are as a seller, what is your address and your electronic contact details, and it was also problematic in many cases.

Why is it important to keep the rules?

One part of the above mentioned rules are based on European legislation, that feels a bit distant for many people, so they tend to apply it with less effort. However it is important to keep in mind that there is a Consumer Protection Cooperation network among authorities that helps the authorities in each member state to find the persons violating the consumer protection rules fast and effectively.

Those who were included in the report as websites having irregularities might expect that the national consumer protection authority will soon contact them. It can also happen that as a result of the many irregularities found during the investigation, the national authorities will pay more attention to the control of the online stores in the future. Thus we suggest considering the above when creating your own website.