Office of Fair Trading produces strategy for online consumer protection
Making sure your company website complies with consumer law on online shopping isn't just good housekeeping, it's also likely to land you more customers.
According to a report by the Office of Fair Trading (OFT), consumers are often put off completing a purchase online due to concerns about the security of their financial information or about having to pay before receiving goods.
Despite the impact that poor consumer protection can have on online sales, the OFT has found that just one in five businesses complies fully with consumer law on online shopping.
Here are some measures that businesses can take to ensure websites adhere to online shopping laws or to reassure consumers that it's safe to buy online, based on findings in the OFT report.
Offer secure transactions
Customers will be more likely to complete a purchase if they feel the website offers a secure way to pay for goods.
According to the OFT report, some consumers have an "unduly high" perception of the risk attached to online shopping, despite reported losses from ecommerce fraud falling by 15 per cent between 2008 and 2009.
Customer confidence can be boosted by using mechanisms to secure payments to the site - such as Secure Sockets Layer encryption of financial information, the Payment Card Industry Data Security Standard, Verified by Visa or MasterCard SecureCode.
Businesses should also set aside space on the site to educate customers on how to shop safely online, for instance, providing a guide to the levels of protection that different payment mechanisms offer.
Shoppers are more likely to complete an online purchase if they feel a website is secure
(Photo credit: Shutterstock)
Be clear about consumer options
Set aside a space on the website that spells out the rights of the consumer if an online transaction goes wrong.
For example, let customers know that they are entitled to a refund if an item they bought online is not delivered by the agreed date or within 30 days of the order being made, and that there is a seven-day cooling off period for online purchases.
Another route to highlight is Section 75 of the Consumer Credit Act 1974, the most common recourse taken by consumers if an online purchase goes wrong, which provides protection for consumers who use their credit card to make purchases of between £100 and £30,000.
A survey Attitudes to Online Markets 2010 found that a sizable number of consumers are unaware of their rights if an online transaction goes awry.
Differentiate between consumers and businesses
Websites that allow members of the public to sell goods should distinguish between sellers that are businesses and those that are members of the public.
The website should also provide information to customers about the different levels of protection that apply to transactions with commercial sellers and transactions with members of the public.
Businesses running trading sites should also take steps to ensure sellers operating as businesses comply with consumer protection legislation.