Buying Digital Goods and Services Online
Businesses must provide certain information when using ‘distance selling’ to sell goods or services.
In most cases, the rules for distance selling apply to sales made by text message or phone, by mail order, or through digital TV.
In addition to those rules, there are extra regulations for selling online, especially on digital services that consumers can download and stream.
Note: There are other rules to follow as well if you are running a VAT registered business. Extra reporting rules also apply if you are exporting and doing business abroad.
Before a Customer Places an Order
As an online seller you would need to provide any potential customers with:
- A clear message that they need to pay when they place an order (one method is a ‘pay now’ button).
- A clear route to make a payment including the options and costs for delivery.
- The steps needed for a customer to place an order.
- A choice of languages they can use and some reasonable steps to inform customers that they can correct any errors in their order.
- A method of storing and reproducing the terms and conditions (e.g. a way to download and print them off).
- The email address of the seller and VAT number (if it is a VAT registered business).
- The cost to use telephone lines or other communication to complete the contract in cases where it would cost more than basic call rates.
- A ‘fair’ and clear description of the goods, digital content, or services you are offering (be descriptive and informative).
- The amount the customer needs to pay (including any relevant taxes) and how they can make a payment.
- Any specific delivery arrangements, including the cost and how long it would take for the goods to arrive.
- The minimum length of the sales contract and the billing period.
- Any specific conditions for ending rolling contracts or sales contracts without a clear end date.
Note: Confirm the contract without delay in an easy for the customer to understand. As a rule, the format must be one that the customer can save for future reference (e.g. an email message).
Selling Digital Services Online
Some digital services allow customers to download or stream them online. In these instances, extra regulations for selling digital services would apply to:
- Computer games
- Computer programs
- In-game purchases
- Mobile phone apps
- TV and film
Downloads and Streaming Services
If you are supplying downloads or streaming services to customers online you would need to:
- Get confirmation from the customer that they are aware of losing their fourteen (14) day right to cancel (before they download or stream content).
- Get agreement from the customer that they will make an instant download (before they start it).
- Include these details and information in the contract confirmation (with any other pre-contract information).
After a Customer Places an Order
Once a customer places an order with through an online selling service, the trader must then:
- Provide the customer with a copy of the contract confirmation not later than the delivery of the goods, or when a service starts, or digital content gets downloaded (e.g. send an email when content gets downloaded even if the arrival times are different).
- Provide the customer with a copy of the contract that they can save for future reference (e.g. by email, on paper, or using another format).
- Deliver the goods without delay and within thirty (30) days (unless the customer agrees otherwise).
VAT Rules for Online Selling in the EU
Special rules apply when registering for VAT in other EU countries because you are selling digital services outside of the United Kingdom.
Note: Failing to follow these online selling rules means the customer keeps their fourteen (14) day right to cancel without paying.
ALSO IN THIS SECTION
Distance Selling | Consumer Contracts (Information, Cancellation and Additional Charges) Regulations.
Unfair Contract Terms | UK rules on using misleading terms in consumer and business sales contracts.