Right of withdrawal: what customers and store operators should know

If goods ordered online aren’t to their liking, customers can exert their statutory right of withdrawal. Read on to find out more about the statutory right of cancellation, which purchases, products, and contracts it does and doesn’t apply to, and how online store operators can formulate and implement a cancellation policy correctly.

The right of withdrawal is enshrined in the Consumer Contracts Regulations which came into force in 2014 and applies only to goods bought online, via mail, or on the phone. Here, the 14 days are considered a cooling-off period that allow consumers to see and inspect a product in person. The right of cancellation states that customers can revoke an online purchase within 14 days of receipt of the goods without reason. In other words, they can declare the purchase or contract as invalid.

The regulation does not apply to purchases made in-store as the legislator assumes customers had sufficient time to check the goods before making a purchase. In this case, a seller may still accept a return, but they are not legally required to do so.

Online shoppers will find that they can often return goods after the statutory 14 days, sometimes 30 days or even 60+ days after they made the purchase. The maximum cooling off period extends to one year. That’s because many stores provide an optional right of return policy. This is not a legal requirement, but a goodwill on the part of the retailer. Where goods are damaged or defective, whether they were bought in-store or online, a buyer’s statutory rights or guarantee applies.

Buyers may revoke contracts and purchases that were arranged by ‘distance selling’. This applies to transaction made through one or more of the following channels:

• Internet
• Telephone
• Fax
• Mail

For the right of withdrawal to apply, distance selling must be a merchant's primary method of sale. If you order something via phone from a nearby shop as an exception, the right of withdrawal does not apply. The same is true for purchases from private individuals, for example, if you purchase goods via classified ads.

Goods offered by business sellers online must meet certain conditions, including satisfactory quality, they must be as described and fit for purpose. For private sellers, goods must only be ‘as described’. Where a seller finds the item does not meet these conditions upon delivery, they can invoke their right to cancel.

The statutory consumer cancellation rights do not generally apply to purchases made in-store or on-site. However, there are exceptions to this rule. If goods are faulty, buyers can always return them irrespective of the seller’s return policy. Sellers are also not allowed to simply refer customers to the manufacturer but must take back the item and issue a refund if requested.

Many high street retailers offer a 14-day or 30-day return policy. Any goods returned will usually need to be returned in ‘as new’ condition, that is unworn or unused, with the tags still intact. Returns may not apply that were on sale and often stores will need to see a receipt (paper or electronic) to process a refund. Depending on a retailer’s policy they may offer store credit instead of a return of funds.

Since the coronavirus pandemic, ‘Click & Collect’ has really taken off. A shopper’s right of withdrawal here depends on their contractual method of payment. If an item was bought online, the right to cancel as stipulated above applies – irrespective of payment or collection method. If goods were only reserved online and purchased i.e., paid for in-store, the statutory right of withdrawal does not apply.

If you made a purchase and wish to withdraw, you must notify the seller of your decision in writing. You don’t need to give them a reason. Many retailers provide a withdrawal form online or enclosed with the delivered goods. Fill out and sign the form and place it in the package with the goods to return before shipping your return ideally via tracked mail services or email. You should ask for a written confirmation of your return.

If no cancellation form is enclosed with the goods received, you can use the following template as a guide. In your email or letter, enter your address and that of the business or store, your customer and/or order number and the date of your purchase.

Subject: Return of goods

Dear [company name]

Herewith, I would like to revoke the contract I concluded [insert description goods, date, item number]. Please issue written confirmation of my cancellation.

The law provides for a cancellation period of 14 days. However, a cooling-off period does not begin until buyers have received their goods. As such, goods received, for example, on the 10^th of the month may be returned until the 24^th. On the other hand, if buyers concluded a contract for a service, for example, a new broadband installation, the cooling-off period begins with the day of conclusion of the contract.

In principle, weekends and public holidays count towards the deadline, but the period may not end on a Saturday, Sunday, or public holiday. If this is the case, the end of the deadline is postponed to the next working day.

Aside from purchases made in-store, cancellation rights do not apply to the following:

• Accommodation, transport, or other services provided for on a specific date
• Food and drink deliveries
• Travel packages
• Premium telephone services
• Customised items, i.e., goods manufactured to a customer’s specifications
• Perishable goods
• Unreturnable items
• Recordings, music downloads, software
• Newspapers and magazines
• Financial market goods affected by market fluctuations

In addition, there are some instances where a buyer’s right to return expires:

• A buyer can no longer withdraw from a transaction if they concluded a contract for a service that has already been provided in full ahead of its deadline. However, this option must have been included in writing upfront.
• Purchase of digital content such as movies. Once a download concludes or a stream begins, the purchase is final.
• Sealed items: once a seal is broken the item cannot be returned.
• In case of sealed or packaged goods that can subsequently no longer be sold for health and hygiene reasons. Underwear and swimwear, however, must usually be accepted for return under a buyer’s statutory rights.

Once a buyer cancels a sale, they must return the unused goods to the retailer within 14 days. Some goods need not be returned in their original packaging.

After return of the goods, the merchant will issue a refund of the full purchase price plus original shipping costs. Additional costs, for example for an express delivery, are excluded from a refund. In some cases, buyers assume the cost to ship a return. However, many business sellers provide the option for shoppers to return their goods free of charge to promote brand loyalty.

Goods damaged by a buyer or those otherwise reduced in value before a return may incur compensation from a seller. However, this does not apply to unpacking and testing an item or trying it on. For example, a buyer can assemble furniture or set up a new television without giving the retailer reason for a claim for compensation. In the case of services, you only have to pay for the expenses that were demonstrably incurred up to the time of withdrawal.

Please note the legal disclaimer relating to this article.