[Article updated and completedin 3 parts, here].
According to data from the National Commission on Markets and Competition (CNMC) published last October, E-commerce turnover in Spain exceeded €6.7 billion in the first quarter of 2017., representing an increase of almost 251% compared to the first quarter of the previous year. According to this data, revenue from purchases made from Spain on Spanish websites has increased by 211% year-on-year, amounting to €2.6338 billion.
For its part, according to the report Total Retail 2017 prepared by the consulting firm PwC, 27% of Spaniards already shop online at least once a week, and around 58% do so once a month..
It's no secret that e-commerce is constantly growing. If you have an e-commerce platform and are (or have been) able to overcome the difficulties inherent in any start-up business (finding an attractive product, negotiating with suppliers, creating a brand image, online positioning, logistics, stock management, etc.), you are probably celebrating your company's success.
Now, have you ever stopped to think about whether your e-commerce business complies with regulations on distance contracting, or consumer and user regulationsDo you know the penalties applicable for non-compliance? Well, that's why we're here.
First, you should know that, according to Article 23 of the Law on Information Society Services and Electronic Commerce (LSSICE), “Contracts concluded electronically shall have all the effects provided for by law.”, provided that there is consent from the parties and the other requirements necessary for its validity are met. This means, in essence, that remote electronic contracting has, in principle, the effectiveness of a real contract between the parties: acquires rights and obligations. You probably already guessed this: your customer buys your product through your website, pays you, and you ship it to them. So far, so good.
But,What does your customer sign or accept when placing an order on your website?What happens if there are problems, or if you are not satisfied with the product you purchased? How should you proceed if your customer makes a complaint?
All these issues, and many others, are usually covered in what are known as general terms and conditions of purchase o general terms and conditions. In general terms, both the aforementioned LSSICE and the Law on General Contract Conditions (LCGC) and, particularly, if your client is considered “consumer”(which is usually the case in today's e-commerce), the General Law for the Protection of Consumers and Users (LGDCU). You should know that your customer will be considered a consumer if they are a natural person acting with a purpose unrelated to your commercial, business, trade, or professional activity.
On the other hand, the above regulations must be understood without prejudice to the fact that other specific sectoral regulations may apply to the particular product or service offered (for example, regulations on package tours, product labeling, intellectual or industrial property, etc.).
The aforementioned regulations impose a series of obligations to the e-commerce owner both in the wording, form, content, and presentation of the general terms and conditions of purchase, as well as in the sales process itself and in its relationship (ex ante and ex post) with the customer. Unfortunately, experience has shown us that many of these obligations are not properly fulfilled by many e-commerce owners who sell products or offer services on a daily basis.
In this regard, as advice to apply to your e-commerce business, We can give you a preview, without claiming to be exhaustive (since drafting complete general terms and conditions of purchase is an arduous and complex task), of the following:“tips”:
- The conditions must be transparent, egg whites, concrete y simple. The user must expressly accept them, acknowledging that their actions imply an obligation to pay.
- The conditions must be available for the user, before starting the contracting process, permanently, easily, and free of charge, and they must be able to be downloadable.
- The font size cannot be smaller than one and a half millimeters.
- It must be given acknowledgment of receipt of the purchase made within a period not exceeding 24 hours (by email or equivalent).
- The user must be provided with the following information prior to being bound by the purchase:, information accurate information on, among other matters, the characteristics of the products, the identity and full details of the owner, and the procedures or means of payment.
- Clear and accurate information must be provided to the user about the prices of the products, their taxes applicable and whether or not the total amount includes shipping costs; as well as the unavailability of the product, where applicable.
- Consumers must be informed of the existence of their right of withdrawal (i.e., your right to return the product), as well as the time frame and conditions for exercising this right.
- You should find out about possible delivery restrictions (for example, because the website owner only ships to the mainland or to certain countries).
- Consumers must be provided with a postal address, telephone number, and fax number or email address where they can submit their complaints and claims, which must be addressed by the website owner within a maximum period of one month.
The consequences of not providing the customer with complete, clear, and simple general terms and conditions of purchase in the legally established manner can be disastrous: from having to endure a 12-month withdrawal period (instead of 14 days, if its existence had been correctly communicated), to potentially being punished with administrative fines which can be substantial.
In this regard, according to the LSSICE, penalties may be as follows:
- For minor offenses (for example, not providing clear information about prices, taxes, or shipping costs; or not confirming receipt of a purchase request within 24 hours): up to 30,000 euros.
- For serious offenses (e.g., failure to make the general terms and conditions available to the recipient of the service; or habitual failure to comply with the obligation to confirm receipt of the purchase request): up to 150,000 euros.
For its part, the LGDCU (applicable, remember, when the customer is a consumer) classifies as serious violation, among others, failure to comply with the obligations imposed by the regulation of distance contracts regarding the information and documentation that must be provided to consumers and users; a penalty may be imposed for this of between $3,005.07 and $15,025.30.
In view of the above, it is clear to us that correctly and comprehensively drafting general terms and conditions of purchase that comply with current legislation can save e-commerce owners a lot of headaches in the future. As this is not a simple task, we recommend that you consult a professional in the field who can advise and assist you in the drafting process.
At Bamboo, we are lawyers specializing in e-commerce., so we can be of great help to you in this regard. You can call or write to us with no obligation, and we can arrange a meeting if necessary (you can see our location on our “contact“).
