What’s the difference between B2B and B2C long distance selling regulations?
There are a few important differences between B2B and B2C long distance selling rules and regulations. The law treats these two differently and indeed. Distance Selling Regulations are indeed no longer valid under UK law. Their replacements are called Consumer Contract Regulations. Coming into force in 2014, they apply when consumers make purchases. Let’s take a deeper look at what they do.
What is B2B
B2B refers to business selling to other businesses. This can be services, information as well as products. Businesses can sell these to other businesses. They in turn add value to them to sell them on and make a profit. This can be through manufacturing new products – such as wheat to bread. They can also simply change the product slightly and move them on. This type of selling is usually high in volume and requires specific infrastructure. You also market in different ways, perhaps through trade shows and business magazines. This is different to marketing on social media directly to consumers.
What is B2C?
B2C refers to businesses selling to consumers. This can be services, information, as well as products. This can be businesses selling goods and services in the traditional way, such as coffee shops, clothes shops and house cleaners. It can also be online selling of products – e-commerce. This involves businesses selling goods online to consumers over the internet.
Sale of Goods Act & Supply of Goods and Services Act
The Sale of Goods Act and the Supply of Goods and Services Act gives consumers the right to ask for ask for refunds and replacements when goods are faulty and misdescribed. This also applies to substandard services. This law applies to B2B contractors but it may be limited through contracts between the businesses themselves.
If a person changes their mind when buying from a business, they can usually get a refund. But can this business in turn ask for a refund from the business that sold them these goods in the first place?
Any entity selling goods in the UK needs to be aware of Consumer Contract rules. These are especially important for consumers buying goods off the internet and were intended to raise confidence in the new medium.
B2B are exempt from these regulations, but must still comply with e-commerce regulations. So what does this practically lead to?
The regulations means that if you sell to a business, you can create and enforce your own terms for returns and cancellations. This is your terms of service and must be clearly written and adhered to. It should state your returns policy. You also need to make sure that all your clients are well aware of it before doing business.
In practice, this means that B2B transactions do not need to adhere to Consumer Contract regulations and can make their own terms.
The Consumer Protection (Distance Selling) Regulations 2000
Under the Consumer Protection (Distance Selling) Regulations 2000, as amended, a consumer can get a refund if they simply change their mind about buying something. This applies to goods and services. It’s between consumers and businesses without an intermediary. The regulations apply to most transactions of this kind on the internet.
What is exempt from the Consumer Protection (Distance Selling) Regulations 2000
1. Business-to-business contracts
2. Financial services sold at a distance (However, these are covered by the Financial Services (Distant Marketing) Regulations)
3. Contracts for the sale of land
4. Products bought from vending machines
5. Goods or services bought at an auction with an auctioneer.
Please not that eBay does not qualify as an auction site.
In B2C, the consumer has multiple rights.
A cooling off period in which they’re entitled to change their minds with 7 days of a transaction. This can occasionally be up to 3 months in certain cases. However, it does not apply to the following.
• Bespoke goods
• Perishable items: fresh food and flowers
• CDs, DVDs and tapes once the packaging has been unsealed
• Newspapers and magazines
• Betting, gaming and lotteries
The rules state that when the Consumer Protection Act applies and the consumer notifies the seller before the end of the cooling off period, they must receive a full refund within 30 days.
Return of goods
Where the Consumer Protection (Distance Selling) Regulations 2000 apply and a consumer notifies the supplier before the end of the cooling off period, the consumer must take ‘reasonable care’ of the product and restore them to the supplier.
This does not mean that the supplier can demand the return of the goods, they must make collection available or reimburse them for the return.
This will not be true if a suppliers puts into the contract that the consumer must return goods at their own cost. Only then will charging the client for a return be legal.
If the consumer has the right to cancel the contract under other legislation, eg. because the goods are defective, the supplier may not charge the customer for returns.
What if a supplier refuses to give a refund or take back goods?
The Office of Fair Trading and the Trading Standards Departments of local authorities in England and Wales have the responsibility for enforcing the regulations.
The Electronic Commerce (EC Directive) Regulations 2002
Any B2B transaction must comply with the aforementioned regulations.they protect the rights of customers buying goods online.
The E-Commerce Regulations apply to an “information society service” defining it as “any service normally provided for remuneration at a distance, by means of electronic equipment for the processing (including digital compression) and storage of data, at the individual request of a recipient of the service.” This indeed applies to e-commerce.
The Electronic Commerce (EC Directive) Regulations 2002 covers
• That’s B2B and B2C transactions over the internet, email or text
• Businesses that advertise on the internet, by email or by text messages
• Business that convey or store electronic content for customers or provide access to a communications network
• Direct marketing by telephone or by fax is not covered by the E-Commerce Regulations.
These are requirements this act places on businesses
You must provide the following information when selling:
• The name of the service provider
• The email address of the service provider
• Details of any trade association which the business is part of
• VAT Number
• Clear and unambiguous prices
UK companies who are trading online must also pay attention to the Companies Act 2006 which states that the following information should also be made available on websites:
• The registered office address
• Company registration number
• Place of registration
If you are sending emails and text messages for advertising or selling purposes, you must include the following information:
• That the communication is a commercial one
• The name of the person on whose behalf the communication is being sent
• If the communication is a promotional offer or promotional competition
• If the communication is unsolicited (spam) it must be identifiable as such from the subject line of the email without the need to read the body of the email text.
You must also provide the customer with the ability to print and store a copy of your terms and conditions of sale.
The E-Commerce Regulations state that consumers placing orders online must be able to:
• Have access to the technical steps to follow in order to conclude the contract
• See whether or not the contract will be filled and how to access it
• Have the technical means in order to identify and correct input errors prior to placing the final order
• Understand the languages offered for the conclusion of the contract
• Have access to specific codes of conduct where relevant
• Access the terms and conditions of sale on the website
Where does this leave you in practice?
If you are a business who bought from a business, you have no legal right to ask for a refund if they state so in their terms and conditions.
If you are a business who bought something use in your business, this is usually B2C and you can return it under the above conditions.