Here is a summary of the trading standards guidelines for businssess selling on auction sites. eBay is a great way for businesses to get selling on the internet quickly and effectively. Remember that you are covered by the same standards as other businesses.
The full standards can be found at on the trading standards website
Do you sell to consumers?
Different rules apply to purchases by consumers and businesses. Items listed on eBay are available to both and so it is best to make sure that you conform to the consumer rules. however, you could you could display one set of terms and conditions for each type of buyer.
Do you sell by auction?
On eBay fixed price or items purchased through a BIN option are governed by different rules than auctions. Sales by auction are exempt from some of the main rules, including the requirement to provide cancellation rights.
Buyers outside the UK
If your goods are available to buyers outside the UK, do not assume that disputes will be dealt with under UK law or in the UK courts.
All EU consumers have the same information, cancellation and basic consumer rights as UK consumers.
The following information must be in, or link to your item listings:
- The identity of your business. A trading name (e.g. ‘Marks and Spencer’) is not enough. The listing should include the full corporate name of a company (e.g. ‘Marks and Spencer plc’), the names of all partners in a partnership (e.g. Mr K Marks and Mr R Spencer), or the name of a sole trader (e.g. Mr K Marks).
- The geographic address where your business is established – A PO Box address is not enough.
- Your VAT number, if you have one.
If your item is offered at fixed price or through BIN you must also include the following information:
- A description of the item.
- The price, including all taxes.
- Delivery costs.
- Arrangements for payment and delivery.
- The existence of the right to cancel (unless an exemption applies).
- Any requirement for the buyer to bear return postage costs, when they exercise their right to cancel.
- The fact that you are a business, if this is not already clear.
A consumer buyer normally has the right to cancel the contract without giving any reason at all. The right is provided because, in distance contracts, there is no opportunity to examine goods before they are delivered.
The consumer can cancel, at the latest, seven clear working days after they receive the goods. If you provide the required information late, the cooling-off period of seven working days starts when the consumer receives that information, or after three months, whichever is the sooner. To exercise the right to cancel, the consumer must notify you in writing or by e-mail.
If an purchase is cancelled you should not leave negative feedback
How do I get the goods back when the consumer cancels?
You are entitled to collect the items. You must do this at your own expense unless you have told the consumer, before they agreed to buy, that they would have to pay the return postage costs.
The goods do not have to be returned within the cooling-off period. The consumer has to take reasonable care of the goods until they are returned or collected. However, they do not have to return goods unused or in unopened packaging, or in such condition that they can be re-sold as new.
If the consumer fails to take reasonable care of the goods, they do not lose their right to cancel, but you may be able to offset the cost of any unreasonable damage against the refund due.
Do I have to refund the consumer’s money?
You must refund all of the money paid, including the price of the goods and the original delivery and packing charges, within 30 days of cancellation.
What are the exemptions?
In the following cases, the right to cancel does not apply:
- Items sold by auction.
- Where the consumer meets you in person, for example to view the goods, before agreeing to buy.
- Goods whose price fluctuates with financial markets (e.g. gold coins whose value is based mainly on the weight of metal in them).
- Goods made to the consumer’s specification (but this does not include goods, such as cars or computers, where components or extras are chosen from a standard list).
- Personalised goods.
- Perishable goods (e.g. fresh cut flowers).
- Goods which by their nature cannot be returned (but this does not include goods which by their nature cannot be re-sold as new, for example for hygiene reasons).
- Audio recordings, video recordings and computer software, but only if the consumer unseals them.
- Newspapers, periodicals and magazines.
Buyers’ rights: Sale of Goods Act
The buyer is entitled to goods that are:
- as described,
- of satisfactory quality,
- fit for their purpose,
- yours to sell (e.g. not stolen, or still on Hire Purchase).
What if the goods fail to meet these standards?
If the goods fail to meet these standards when the buyer receives and inspects them, they can reject them.
A business buyer, however, cannot reject goods if the breach is slight and rejection would be unreasonable.
When the buyer rejects goods, they can claim a full refund, including all postage costs, plus compensation for any other losses which occur. This can include the extra cost of buying a satisfactory replacement elsewhere, or compensation for any damage caused by the goods.
If the buyer delays in making a complaint, or if a fault or misdescription comes to light some time after delivery, the buyer may only be able to claim a repair, replacement goods or compensation. However, the buyer’s rights against you, the seller, remain in force throughout the reasonable life of the goods. This is often longer than a manufacturer’s guarantee period.
What if the goods are damaged in transit?
If you are selling to a consumer, you are responsible for the risk of loss or damage in transit, until the goods are delivered. If you wish to take out postal insurance, this is your responsibility, not the consumer’s. Postal insurance should therefore not be offered to consumers at an extra charge.
If you are selling to a business, they are responsible for the risk of loss or damage to the goods as soon as ownership passes to them. This normally happens when payment is made, so you may wish to offer postal insurance to business buyers, and you may wish to make an extra charge for this. If you do offer postal insurance, the buyer will expect you to make any claim on their behalf when the goods are lost or damaged.
What if the buyer is dissatisfied?
If the buyer says that there is a problem with the goods, you should consider whether their claim is justified. If it is, try to resolve the matter promptly. If you believe that the claim is unjustified, contact the buyer and explain why. They may wish to go through eBay’s or PayPal’s dispute resolution process.
Ultimately, a buyer might take their complaint to your Trade Association, to arbitration, to an ombudsman scheme or to Court. You should therefore retain any important evidence and be prepared to show that you have made a reasonable response to the complaint (even if you think that it is unjustified).
Can I use contract terms to limit my liability?
Where you sell to a consumer, you cannot use contract terms to limit your liability for supplying faulty or misdescribed goods. Any such terms in your contract will have no effect, and it is a criminal offence to display them.
Where you sell to a business, you can use contract terms to limit your liability, but only if the exclusion is reasonable.
Other Trading Standards Law
Sales at Internet auction sites are covered by the full range of Trading Standards law. These laws are mostly intended to protect the public as a whole, and not to provide redress to individual consumers. The rules include the following:
- False and misleading advertising – False and misleading descriptions of goods, and adverts which are false or misleading about any aspect of your business, are prohibited by law.
- Counterfeit and copied goods – It is a criminal offence to sell counterfeit goods and to sell unauthorised copies of copyright work (such as audio and video recordings or computer software and games).
- Misleading prices – It is a criminal offence to display misleading prices to consumers. A price indication can be misleading if it does not include taxes or compulsory extras such as delivery costs. You should not make comparisons with ‘recommended’ or ‘list’ prices unless those prices have genuinely been recommended to you by your supplier or the manufacturer and the recommended price is not significantly higher than prices at which the product is generally sold.
- Product safety – All goods must be safe, and some goods (e.g. electrical goods, toys) have to comply with specific safety regulations.
- Legislation – This guidance is based on consumer protection legislation which includes:
Consumer Protection (Distance Selling) Regulations 2000
Electronic Commerce (EC Directive) Regulations 2002
Business Names Act 1985
Business Advertisements (Disclosure) Order 1977
Sale of Goods Act 1979
Sale and Supply of Goods to Consumers Regulations 2002
Consumer Transactions (Restrictions on Statements) Order 1976
Unfair Terms in Consumer Contracts Regulations 1999