Protecting consumers in online sales
Online shopping has become an integral part of our lives. We search online every day and add a product to our shopping cart with a single click. It’s no surprise, then, that strict rules apply to online stores. And more regulations are on the way. On May 28, 2022, new rules will take effect in accordance with European directives. The bottom line is that, as an online store owner, you’ll need to provide more information and be more transparent with consumers.What happens if you don't follow the new rules for online stores?
Those rules are in place for a reason. There are plenty of stories out there about bad purchases and scams involving online stores. These rules protect consumers in online transactions. If you, as an online store owner, violate these regulations, there will be consequences. You’ll find yourself facing the Netherlands Authority for Consumers and Markets (ACM) and the Netherlands Authority for the Financial Markets (AFM), the market regulators.The consequences are no small matter. The authorities can set a deadline by which you must comply with the rules or issue you a fine. And that fine can be substantial: ranging from 4% of your annual revenue to 2 million euros if no information is available regarding your annual data. It’s a good idea to take a closer look at these new rules using our step-by-step guide.
A step-by-step guide to creating a modern online store
Take a look at our step-by-step guide and check which rules apply to you. That way, your online store will be fully up to date, and you won’t end up with fines on your doorstep.- Do you display reviews on your online store? Reviews play a major role in consumers’ purchasing decisions. That’s why it’s important for customers to have all the information about those reviews. As an online store owner, you should provide more details about how you collected those reviews. Consider the following points:
- Please indicate whether and how you verify that customers have actually purchased a product or service and are therefore providing an honest review.
- Please indicate whether you include both positive and negative reviews to provide an accurate picture of the product.
- Please indicate whether you paid customers or offered them anything in exchange for posting a review.
- Do you offer personalized recommendations to your customers? You want to provide your customers with recommendationsthat are as relevant as possible to their search. To do this, you consider factors such as what the customer has previously searched for and purchased, where they live, and other characteristics. Inform customers about this before they make a purchase, for example, via a pop-up or a message on the checkout page.
- Do you offer discounts in your online store? Discounts are a good incentive for customers to make a purchase. Under the new rules, starting in May, it will be prohibited to use arbitrary prices when offering discounts. You may still list competitors’ recent prices or the suggested retail price on your website. If you compare your own prices, use the lowest price you’ve charged in the last 30 days.
This rule was introduced to prevent online retailers from raising prices and then offering a discount the following week. After all, that’s not fair to consumers.
- Do you offer your customers free online services? You not only offer your customers products, but also give them the option to sign up for free online services. Think of social media or newsletters. Indicate how long consumers can use this service and explain how they can unsubscribe. They also have the right to cancel within 14 days without giving a reason. And as soon as the unsubscription is complete, you must stop processing the customer’s data and delete it.
- Is your online store an online marketplace or a comparison site? For these two types of online stores, there is a requirement to provide visitors with more information. For example, on an online marketplace, it must be clear to consumers who they are purchasing from before they check out. Are they buying from a private individual or a business? And what are the terms and conditions? In addition to this duty to provide information, as an online marketplace operator, you have a duty to investigate: ensure that you request all legal information and terms and conditions from the sellers on your platform in advance.Comparison sites are also subject to a broader obligation to provide information. When consumers compare products or services via your website, you must clearly explain to them before the purchase how the search results were generated. You may omit all technical algorithms. What you must disclose, for example, is whether companies pay to appear higher in the rankings.
