Monday, 28 March 2011 16:43
March 24th... Dark days for all european e-commerce businesses.
The European Parliament just approved a new set of rules and best practices for online based businesses. Should those rules be implemented as released a few days back, the economic impact for online based businesses will be huge and disastrous. Tight profit margins will become paper thin tight!
See for yourselves:
- Clients will have up to a whole month (vs. 7 days at the moment) to return goods. Most Europeans countries legal time frame being around 7 days. So from now on, the online client will have 14 days to tell the online shop that he/she wants to return the purchased product and another 14 days to return the product itself. The overall time frame is then extended to 1 month.
- From now on, online shops will have to refund the purchase before being able to check the returned goods are in their original state (not damaged, tempered with, etc). According to the new EU rules, the seller - i.e. the online shop - will have to refund the buyer, at the latest, within 14 days after the named buyer contacted the seller to advise them of the return... So, Joe Buyer advises John Seller on day 1 he is not happy with his newly purchased item. John Seller will have to refund in full that purchase by COB day 14 when Joe Buyer has up to day 30 to return the purchased item...
- For any purchases from 40€uro and above, the online shop will have to refund the return transport costs in full (on top of the original transport costs) for any clients returning their items. Happy client orders 78 dresses on Monday, gets them delivered on Friday, makes her choice over the weekend, keeps one dress and return the rest of them... Who makes a profit? Who makes a loss? Germany has been having such rule for returns since 2002 and has a return goods rate of 3 times higher than France's!
- Last but not least, the e-commerce site will have to support all transport costs, whatever the territory of delivery is when a client decides to cancel his order. So, Joe Buyer is in Greece, he buys a 20 years old whiskey on JohnIrishWhiskeySeller.ie but then decides to cancel the order when the order has already been dispatched. John 'Irish Whiskey' Seller will have to pay for the transport costs from Ireland to Greece as well as the return goods transport costs.
Should those new set of rules be voted in two months time, this means we are stuck with them for the next 10 to 15 years across Europe! What will the European e-commerce landscape look like by 2026?