On Friday, June 13, 2014, changes to the EU Consumer Legislation will come into force, which will oblige online traders e.g. in Germany and Austria to adapt their shop environments to the new legal situation. This will in effect implement the Consumer Rights Directive (VRRL). Our plugin WooCommerce German Market will be updated concurrently with the changeover. Attorney at Law Thomas Schwenke, LL.M. (UoA), who has been working with us since the first version of German Market, will be ensuring legal certainty. We have interviewed him on the legal changes and asked him about the update of WooCommerce German Market.
Please note, that this text is translated from German. Legal terms like Cancellation Notices are not suitable for official usage.
What is the most important change in the legislation?
The main points are without a doubt the new Cancellation Notice and the numerous necessary adjustments.
There now is an official Cancellation Notice available, which can be amended with various different provisions depending on contract and delivery type (see below in quotation marks). As a result there can be several different types of notices (CN = Cancellation Notice, editor’s note):
- CN1: Contract in which goods ordered in one contract are delivered in one delivery: “The deadline for cancellation is fourteen days from the date on which you or a third party named by you and who is not the carrier has taken possession of the goods.” This Cancellation Notice is included in the General Terms & Conditions of WooCommerce German Market as standard.
- CN2: Contract in which ordered in one contract are delivered in separate partial deliveries (e.g. if the goods are not in stock or the permissible weight for one parcel is surpassed): “The deadline for cancellation is fourteen days from the date on which you or a third party named by you and who is not the carrier has taken possession of the goods delivered last.”
- CN3: Contract regarding the delivery of goods in several partial consignments or parts (e.g. a built-in kitchen): “The deadline for cancellation is fourteen days from the date on which you or a third party named by you and who is not the carrier has taken possession of the partial consignment or part delivered last.”
- CN4: Contract regarding the periodic delivery of goods for a specific period of time (e.g. subscription contract): “The deadline for cancellation is fourteen days from the date on which you or a third party named by you and who is not the carrier has taken possession of the first installment of the goods.”
What happens if, for example the situation of a shop changes after the order, and the delivery is delayed, because it is received late from the manufacturer?
If that is the case, the customer has to be notified “in retrospect”, i.e. he will have to receive WB2 with the remark that it will apply.
Won’t that cause a lot of extra work, since goods are sometimes shipped together and sometimes separately?
Yes, it would become almost impossible to handle – unless the shop system knows beforehand, whether the delivery will be shipped as one or in parts.
In order to avoid problems of that kind, many legal experts – including me – think that the trader should use the Cancellation Notice WB2 even if the goods are sent in one single delivery (which would make it a case for WB1). After all: if the customer knows that the cancellation period begins with the receipt of the final part of the delivery, then he has all the information he needs, even if the first delivery received is also the last.
In that case, a notification in retrospect would be unnecessary, even if the delivery occurs in parts. This solution does, however, differ from the official Cancellation Notice for individual amendment, which means the trader would take a risk of the notification not being recognized in a court of law.
Only if the official Cancellation Notice for individual amendment is used unchanged and for the relevant delivery constellation, then it will definitely be recognized as legally binding. It is therefore not advisable for traders to use an own, differing cancellation notice without expert legal advice.
Why can’t you combine all possible types of the Cancellation Notice into one single one for all eventualities?
Legislature does not provide this option for the legal Cancellation Notice for individual amendment. Besides – the resulting legal jargon would be too much for consumers, and he might no longer fully understand the rights he should be notified of. I do, however, think that it is possible to use a standardized cancellation notice in which the various delivery types can be combined. In other words – the cancellation notice would contain “if … then” alternatives.
You could, for example, write as per my solution to your previous question: “CN1 applies if you receive the goods in one single delivery; CN2 applies, if you receive the goods in several partial deliveries”. (This is – of course only an oversimplification to illustrate the point!)
This too will hold some legal risk, but would in my experience be easier to manage for traders, as they would otherwise require personnel-intensive handling, just like in a stationary shop or a dynamic shop system. A dynamic shop system would have to be able to recognize the constellation at hand (i.e. if goods were ordered in one contract, but are delivered in installments or individual parts).
A system of this type and its maintenance would be prohibitively expensive. There might also arise a risk regarding financial penalties if the wrong cancellation notice was provided for a specific purchase constellation. It might therefore be financially viable for many traders to use a custom cancellation notice and not the official sample Cancellation Notice for amendment.
What’s New in eBooks and Software Downloads?
A different kind of cancellation notice applies for the delivery of digital content, which is not provided on a physical data medium (software downloads, eBooks, etc.). “The deadline for cancellation is 14 days after the date of the contractual agreement.” This cancellation notice is provided automatically in WooCommerce German Market if traders offer digital content in their shop.
The fact that there is a cancellation notice at all for digital content is new. The customer can, however, waive this right to cancellation. He will simply have to select a check box stating that he agrees to receive the download immediately, but that his cancellation right will then be waived.
What would actually happen if the cancellation notice is inapplicable?
If that were the case, traders could on the one hand receive a written warning and would have to provide a declaration of omission stating that they will not repeat the error in future. They will furthermore be liable for the cost of the written warning, which can be between €800 and €1000, plus costs for his own legal advisor. Furthermore, the cancellation period for consumers would be extended from 14 days to 12 months.
Is it true that traders must now deliver goods sealed?
That is true for the case stated in the new paragraph 312 g, Sect. 2, No. 3 of the German Civil Code (BGB), in the event of which it ceases to apply: “… for contracts for the delivery of sealed goods, which, for reasons of health and hygiene, are not suitable for return once the seal has been removed after delivery.”
A seal in this case is not just packaging or an adhesive strip – it will be a cover that is easily recognizable as a seal, which has to be broken to access the content. I would therefore recommend attaching a decal saying “Seal” or similar if there could be any doubt of whether or not the packaging is a seal.
Is it true that customers will have to use a cancellation form and state a reason for their cancellation?
No. I have seen that in a few places, but it is untrue. True is that the customer must clearly state that he is making use of his cancellation right. That means it no longer suffices to simply return the goods. There is a legal Cancellation Form for every individual cancellation notice.
There is, however, no obligation to actually use the word “cancellation”, or to use the form, and there is absolutely no obligation to state a reason for returning the goods. The customer must only clarify the fact that he wishes to disengage from the contract. He can do so by simply stating “I wish to return the goods”.
And is it true that the cancellation must be acknowledged?
Many people do say that, but an acknowledgement is required only if the customers is offered an online form for declaring his cancellation.
Are traders obliged to return costs to the customer immediately?
The trader is given a little bit of leeway. Customers are required to return the goods within two weeks of the date on which they declared the cancellation. The trader will not be required to return costs until he has received the returned goods.
A cancellation can also be effected over the phone. Does that mean traders must supply a phone number in the Cancellation Notice?
It is not absolutely clear whether or not a telephone number must be supplied, or whether that is only an option. I would in any case recommend adding a phone number for more legal certainty, unless there is some important reason not to include one, which will rarely be the case.
Is it true that in case of cancellation, the customer can be made liable for return delivery costs?
Yes, there now is an option to select whether the customer or the trader will be liable for these costs. It all becomes a little more complicated for carrier goods that cannot be mailed i.e. sent by post.
The new legislation offers some relief, as the trader is no longer required to pick up the goods at his own cost. This does, however, have one big drawback. The trader must state costs for pick-up of the goods, or must at least provide a pretty accurate estimate if he cannot be expected to state the exact amount. This may be no easy feat, as costs often depend on a variety of factors, including distance. On the other hand, the trader must not provide an estimate that would be prohibitive for the customer, because it could prevent the customer from using his right for cancellation, and thus create a breach of competition law.
In a case where the cancellation comprises both parcels for posting and carrier goods, a constellation could be created that would not be covered by the official cancellation note, and for which an exception would have to allowed at the risk of the trader as described above.
In any case: traders must identify items as carrier goods in the product description. The customer must be able to tell that he is ordering carrier goods before he adds these to his cart.
Are there any other important new points to note?
One point of particular importance is the duty of disclosure. The time needed for deliveries, for example, must always be stated. Where no exact time can be given, “approx.” must be added.
Traders should also provide detailed information about shipping costs, including costs for deliveries to a foreign country. The note “Costs for foreign deliveries on request” is often used, but invalid. Customers must know beforehand how much a delivery to specific countries will cost. Additionally, only those countries to which deliveries will be made should be enabled in the WooCommerce settings.
Accepted payment options must similarly be stated on the customer information page. That means: Every shop should have a section dedicated to customer information, where payment options, delivery terms, and shipping costs are clearly stated.
Is it true that in the case of eBooks and software there is an obligation to state technical information?
There is a new duty of disclosure in this area as well, and specifically if the software is subject to compatibility limitations. These will in most cases be the typical system requirements, which are stated as standard anyway. New is the fact that technical protection measures must be stated, for example DRM measures for eBooks.
Is it true that warranty information must be provided?
Yes. The trader is obliged to provide information about existing product and return warranties, as well as their stipulations. (Warranties are return conditions, which are provided in addition to statutory guarantee and cancellation rights.)
All information can be provided on one central information page if it is only one general type of warranty (e.g. a “30-days money-back guarantee”), or as part of the individual product descriptions. In the case of manufacturer warranties, traders have the option of linking the warranty conditions of the manufacturer, provided these are available online. Traders must in that case always point out the fact that it is a manufacturer warranty, as they will otherwise have to provide the same terms themselves.
All that sounds like a lot of changes. How were these implemented for WooCommerce German Market?
We took a standard shop with one order and one delivery, and/or the provision of digital content as our guideline. That is the pattern, which will apply for most shops. Instructions with additional samples for cancellation notes are provided in the download package for other shop constellations.
A relevant check box for the waiver of the cancellation right has been implemented for the sale of digital content, which prevents the customer from cancelling the contract after he has received his download link. We have furthermore adapted the Terms & Conditions to reflect the new legislative changes.
How do you personally feel about the changes?
I think it is a good idea to clear up legislation and to harmonize EU law more and more. One big drawback of these changes is, however, that nobody thought about the problems online shop operators could run into. I also don’t think that “quantity instead of quality” is really what consumers want in terms of information.
You have helped fulfill individual requests from users of German Market in the past. Can you tell us how much that cost them?
My office is always open to help with individual adaptations or shop audits. The cost will of course depend on the scope of work required. In other words, on the type of goods being sold, whether or not the T&C will have to be changed or reviewed, etc. That is why it is a real advantage that WooCommerce German Market is already as legally secure as possible. Costs will therefore be usually between €500 and €900.
Thanks for the interview.
I thank you too, and I wish all online shop operators a smooth and easy transition!
Attorney at Law Thomas Schwenke, Dipl.FinWirt(FH), LL.M. in Berlin specializes in legal advice for marketing, eCommerce, data protection, and contract law. He has authored the book “Social Media Marketing & Law” (in German). Website: rechtsanwalt-schwenke.de
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