Internet auction sites-guidance for sellers

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1 Internet auction sites-guidance for sellers ternet auction sites, they often do so to sell off s a mall goods or services and g t s are sold by auction and some are not. Sales by auction are exempt from some of the main rules, including the Issue 2 TradingStandards,GrahamHilHouse,FeryHinkseyRoad,Oxford,OX20BY trading.standards@oxfordshire.gov.uk option2This leaflet provides a summary of the main rules for businesses selling goods at internet auction sites. Are you a business? When people start to use in their own unwanted items. It is not always clear whether a seller is acting a business or as a private individual. Consumer law does not provide a strict definition of business. If you acquire or make goods with a view to selling them on internet auction sites, then you are likely to be considered as a business. You may be a business even if your activities provide only a s income, if they are not your main occupation or if they are done from home. Do you sell to consumers? Consumers have certain statutory rights when buying these rights cannot be excluded (see Buyer s Rights below). Business buyers have fewer statutory rights. A consumer is a person who is buyin goods for their own personal use. Items listed on internet auction sites will normally be considered available to consumers. You may have to prove tha the buyer is not a consumer, if you want to exclude the buyer s consumer rights. Do you sell by Auction? On internet auction sites, some item

2 requirement to provide cancellation rights (see below). Internet Auction Sites Guidance for sellers Business Advice Leaflet. There is no statutory definition of an auction, but all auctions involve some form of competitive bidding. If your item is listed at a fixed price or sold through an instance purchase or second chance option, then it is not sold by auction and it does not enjoy the exemptions which are available for auction sales. Information Requirements Certain information must be provided to potential buyers before a contract is made. You can comply by including this information in your item listings, or clearly linked from them (e.g. in an About Me page). In all cases, including sales by auction, you must declare: 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. This requirement applies even if you choose to operate your business from home. A PO Box address is not enough. Your VAT number, if you have one. If the item is being offered to consumers at a fixed price, or with an instance purchase option, 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. Personalised goods

3 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 What can the buyer expect? The buyer is entitled to goods that are: As described, Satisfactory quality Fit for their purpose Yours to sell (e.g. not stolen, or still on Hire Purchase). These rights apply to imperfect goods (seconds) and a second-hand goods just as they do to new items. However, depending on the price and description, a lower standard of quality or durability might be considered satisfactory. If you are aware of any defects, describe them in the item listing. What if the goods fail to meet these standards? If the goods fail to meet these standards when the buyer received 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, 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

4 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 sometime 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. If the buyer is not satisfied with your response, or if you cannot agree a solution between yourselves, the buyer might claim under the auction site s (or payment service s) protection scheme. If they have used a debit or credit card, they might ask the card issuer to obtain a refund by processing a chargeback. 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 is unjustified).

5 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: 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 your 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.

6 Legislation This guidance is based on consumer protection legislation which includes: Consumer Protection (distance Selling) Regulations 2000 Electronic Commerce (EC Directive) Regulations 2002 Companies Act 2006 Consumer Protection from Unfair Trading Regulations 2008 Sale of Goods Act 1979 Sale and Supply of Goods to Consumers Regulations 2002 Unfair Terms in Consumer Contracts Regulations 1999 Further Information Please note that this is only a summary of the legislation and is intended as a guide only.