Do UK businesses have to accept returns and give refunds?

Samir Kamnani

·

December 20, 2024

If you’re new to launching an online business in the United Kingdom, you have a lot of ground to cover—getting registered as a seller, stocking up on product inventory, setting up your ecommerce platform, and getting a point of sale solution in place, just to name a few.

But there’s one critical area of business you may not have even explored yet: your customers’ rights when it comes to requesting refunds for products they’ve purchased.

Before you open your virtual doors, it’s important to have a strategy in place for managing returns. The right returns policy can help you strike the balance between delighting your customers without hurting your profit margins, and ensure that you stay in compliance with U.K. consumer rights laws.

Here’s a look at what U.K. law says about consumers’ rights to returns—and how your brand can create a best-in-class returns policy.

What does UK law say about refunds?

Under U.K. law, ecommerce business owners are obligated to provide refunds under certain conditions, with different time frames based on the reason for the return request. Here’s a look at what the law requires:

14 days to request returns on all products

For all forms of “distance selling,” which include online, mail, and telephone orders, shoppers have 14 days to give notice if they’d like to send back their product for a refund, for any reason. They then have 14 days to return the product to you, after which you have an additional 14 days to refund their fees.

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6 months to request returns on products that don’t meet standards

If a customer has unknowingly purchased an item that doesn’t meet consumer rights standards, they have a full six months to make a claim on the item and request a repair or replacement. There are three situations in which products are eligible for this extended returns period:

1. Quality issues: The product was damaged or faulty when the shopper received it.
2. Fit for purpose: The product should do what it is described to do, whether in your marketing materials or customer support chats. For instance, a light bulb with a claimed lifespan of 2,000 hours should not fail after 300 hours.
3. As described: The product description makes false claims about the product, such as the type of material it is made from.

As a seller, you have one chance to replace or repair the product to the buyer’s satisfaction. If they still aren’t happy, you’re then required to refund them for their purchase.

Setting up your returns policy

We’ve covered what the law says—but those are only the minimum requirements for what you should offer your shoppers. To stand out in the world of ecommerce, consider being more generous and flexible in your returns policy.

• Offer a longer return windowThe law requires a minimum return request window of 14 days—but what if you offer your shoppers a full 45 days to evaluate their purchase, and make a return for any reason? After all, it’s in your interest to make sure that shoppers are genuinely happy with their purchases, and if they haven’t had enough time to consider the product, they’ll miss the window for a return and end up with an item they don’t want. With an extended returns period, you’ll give them ample time to consider their purchase so that you can ensure their satisfaction.
• Incentivise exchangesIf a shopper didn’t care for the product they ordered, that doesn’t necessarily mean they wouldn’t purchase from your brand again—the item might have simply been the wrong fit or style. You can use Loop’s seamless Instant Exchange tool to encourage shoppers to trade in their product for an alternative, giving them the opportunity to browse through your entire inventory and apply their credit towards an item they like better. Exchanges help you retain revenue from returns that you’d otherwise lose, and help you avoid customer churn.
• Offer an extended warrantyWhilst shoppers are entitled to a six-month review period under law for product defects and other failures to meet consumer standards, you can demonstrate confidence in your products by offering a longer warranty period. To show that you truly stand behind your brand’s value, consider offering a one- or two-year warranty period—or even a limited lifetime warranty, like Le Creuset’s, which covers a product replacement for the shopper’s entire lifetime as long as conditions are met.

By offering generous returns and warranty policies, you’ll be able to stand out from your competitors who only meet the minimum standards, demonstrating to customers that you truly value their satisfaction. Using Loop’s U.K. returns management solution can help you streamline your policy management, ensuring that shoppers can quickly initiate returns and get the outcome they prefer, including the option to convert a refund to an exchange. That will help you retain more profits from returns, and grow your base of repeat customers.

It’s time to stop thinking of returns as a cost center, and consider them as a profit center that will help you grow your business with state-of-the-art post-purchase experiences. By creating and implementing customer-centric returns policies, you’ll be able to build goodwill with your shoppers that will keep them coming back time and again. The right technology can help: With Loop, you’ll be able to automate returns to better manage compliance requirements, while prioritising customer satisfaction and streamlined operations.

Learn more about how Loop can help you build a winning UK ecommerce business. Get a demo.

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