The laws, rules and regulations that govern online selling
Setting up a website or online shop is pretty simple. The advances in technology and growing popularity of online shopping, combined with competitive parcel delivery rates, have all made online selling anyone's game.
However, before launching yourself 100 per cent into your eBay store, website or online market place, there are some key rules and regulations which you should be acquainted with first, to be certain that you are upholding the law, as well as offering your customers the best possible experience.
Sale of Goods Act 1979
Any business that supplies goods; whether it's a bricks and mortar shop or online business, must follow the Sale of
. Amended in 1979, this law protects consumers from being ripped off by cowboy traders. It states that all goods sold must be as described (in the case of online selling this will refer to the listing), of satisfactory quality and fit for purpose.
As long as you make sure your goods and their listings meet these basic conditions then you shouldn't have anything to worry about. Just be sure to include good photos and be honest and clear in your listing description. The act also applies to second hand items, for example those being sold by auction on eBay.
Rules for traders selling online
The UK government
outlines a set of regulations that as a trader you must adhere to when selling online. These rules are in place to protect and inform your customers, but they also provide a defence for you (should a customer wish to cancel an order, for example), and ensures each party knows where they stand. Any distance sellers - whether online - or by the more traditional mail order - must follow these rules before and after an order is placed.
Providing information before the order is finalised
The government states that you must display certain information for the customer before the order is placed. Perhaps most obvious of them all; you must display the price, including all taxes that are applicable such as VAT. There's more on VAT later.
Also important is your business name and contact details, as well a description of your goods or services. Try to make this description as detailed and clear as possible to be on the safe side and avoid any possible quibbles. You must make it clear how a customer can pay - for example, state the types of card payments you accept, or whether you only allow PayPal.
Make it clear how the item will be delivered, as well as the cost for delivery and how long it might take. Offering a reasonable estimate is acceptable and choosing a reliable parcel delivery
company will mean you can give your customers a more exact delivery date.
If a contract is necessary you must state clearly the minimum length of the customer's contract and any conditions relating to it.
UK law provides a 14 day cooling-off period after purchases. This means that you must display information about the customer's rights if they choose to cancel within these 14 days. If you are not providing a free returns service and wish for a customer to be responsible for any postage costs due for returning unwanted goods, you must tell the customer first. If you don't then they will not be liable for these costs.
What happens after the order is placed?
After the order has been placed you must contact the customer in writing before the goods or services are delivered; many people use automated software to handle this, often it is built in to the platform you use. This communication must include details of the items or goods the consumer has bought, along with the total costs and the arrangements you have made for delivery. For online sales you must acknowledge the receipt of an order as soon as possible and "take reasonable steps" to allow the customer to correct any errors in their order.
The information already stated above must be re-iterated, with details of any guarantees or after-sales services, instructions on how to cancel an order and the address where complaints can be sent. You must also detail any call charges above standard rates for complaints or helplines. You should also provide your VAT number, if applicable.
Terms and conditions should be available, it's a good idea to display these on your website, but customers must also be able to store and reproduce these - for example by printing them directly from the site or downloading them in a PDF form.
All of these regulations will not only mean you are compliant within the law, but they are all good practice for user experience and will help encourage your customers to return again and again!
International selling laws
If you're selling items overseas then there are a few extra rules of which to be aware. If you are VAT registered and charge VAT to your UK customers then you must also do the same for EU customers.
When selling outside of the EU you must not charge VAT, instead you should fill out a customs declaration. The form you choose will be dependent on the value of your package, and ipostparcels will help you generate your customs declaration when you book in your parcel
Good record keeping is a must, as with all aspects of running a business. When it comes to international parcels you must keep a 'proof of export'. According to the Gov.uk website
• the customer's name, VAT number and delivery address, and other details relating to the order
• packing lists
• details of insurance or freight charges
• consignment notes
• commercial transport documents
• internal correspondence
• sales invoices
• advice notes
• bank statements
Making sure you're registered
If you're selling regularly online to make a profit then it's important to make sure you are registered with HMRC to avoid any potentially nasty fines later on. If you're just selling the odd bag of unwanted clothing or memorabilia on eBay then you should be fine. However, if you are regularly selling your handmade creations or plan on turning your online shop into a real business then you should make sure that you are registered as a trader - or even a limited company - with the HMRC. If you're sending a lot of parcels you'll likely need to register as self-employed, which means a yearly tax return. If you're unsure it's best to check
Thankfully, as a small business or online seller you'll only have to worry about registering and paying VAT when your turnover reaches £82,000 a year or more. You can register voluntarily but it isn't required until you reach this limit. New EU rules were introduced in April 2015 regarding VAT on digital products that do affect traders below the threshold. You can read a more detailed article about VAT and the VAT MOSS system here
As a business big or small, you should always handle customers' data with care. This means storing data in accordance to UK data protection laws. As an online business you should also take care to use a secure server when processing payments. Online marketplaces such as eBay and Etsy will take care of this for you, and when setting up your own website your payment gateway provider will keep these details secure. You should be diligent, however, when taking and storing customer account details and storing them on your website server. More information on data protection can be found here
The Government website is the place to go for detailed information around online selling laws, to ensure that your online business is compliant. For more tips and advice on running your small business then check out our collection of industry insight articles
Also see related content...
Sending parcels to the UK
Sending parcels Internationally