Distance selling - What is distance selling?
Distance selling refers to the sale of goods or services without the buyer or seller being physically present simultaneously
Do you run an online shop? Keep invoicing simple and fast with online invoicing software like Debitoor. Try it free for 7 days.
Traditionally, the term ‘distance selling’ has been used in discussing sales made, for example, via mail order, through phone or SMS, or even from a digital TV ad. These types of sales don’t require the presence of both the buyer and the seller.
It commonly applies to contracts that involve a regular transaction, such as set grocery deliveries, catering arrangements, accommodation, etc. Today, many also apply this term to online sales, including those made via email.
What you need to do as a distance seller
While distance selling might seem relatively straightforward, for businesses in many locations, there are some rules that need to be kept in mind. In the UK, the gov.uk site on distance selling provides outlines on the following information to your customers:
- Provide adequate information about your product/service to the customer (pre-purchase information)
- The name and contact details of your business
- A description of the products/services you are providing
- The price of the products/services
- Whether a substitute will be provided if a specific product/service is unavailable
- Information about how payment can be made by the customer
- Details about shipping arrangements including cost and time
- Clear indication of the contract length and billing period
A main aspect of distance selling is the right for the customer to cancel. Customers have the right to cancel an order within 14 days of it being delivered. No reason is required for cancellation. Therefore, as a distance seller there are some additional information that must be provided to your customer from the beginning:
- Outline of conditions for cancelling a contract
- How a customer can cancel and if/how they would not be able to do so
- If any costs will still be required after a cancellation and why
- A cancellation form
- Details about any deposit made as a guarantee
The 14 day cancellation timeframe is known as the ‘cooling off period’. This means that even after agreeing to a contract, a customer can withdraw without any consequences. If you do not inform a customer of this option, they then have 12 months to cancel. If they’re informed later on, it’s again 14 days from that date.
These requirements generally apply to all distance selling, however it always important to double check whether there are requirements specific to your industry or business, for example, there are differences when it comes to selling online.
Online sales and distance selling
Although many consider online sales a type of distance selling, there are certain additional rules that apply to selling online. This means that the above rules for distance selling apply, as well as a set of other rules pertaining to before and after an online order is placed, as well as when it comes to providing digital services.
A few key differences in online sales vs regular distance selling include:
- Your company email address
- A clear step-by-step of the order process
- Providing an option to pay when an order is made (for example: a ‘Pay now’ button)
- An easy way for customers to make corrections to an order
- Access to and storage of your Terms & Conditions
And others. Check gov.co.uk Online Selling for the full list
Distance selling goes beyond conditions for the experience that a customer should have before placing an order. They extend to what happens after the order is made.
Rules for handling an order with distance selling
Once an order has been placed there are still rules, however, fewer than before the sale is made. The three main requirements are that:
- The contract established with the customer is provided to them in a format that the customer can save (email, PDF, paper copy, etc.)
- The contract must be delivered on or before the date that the products/services are delivered
- Any products must be delivered within 30 days unless otherwise agreed with the customer
Exceptions to the rules for distance selling
As with most things in life, there are exceptions to the rules. In this case there are a long list of exceptions. Most notably:
- Based on the total value of the sale (sales worth £42 or less)
- If the sale pertains to financial services
- A regular sale of food and/or beverages (milkmen, for example)
- Bus, train, or plane tickets
- Sales made from a paid internet connection such as an internet cafe
- New building construction (not renovations or add-ons)
- Contracts made for rental properties in which the customer will live
- Timeshares, holiday packages, etc.
- Vending machine purchases
Again, it is always important to check whether the rules apply to your particular business.
Consequences of not following distance selling rules
Should you offer distance selling, these rules must be adhered to - failure to do so can result in a range of different penalties ranging from being required to provide the products/services as promised, to pay compensation, or even face jail time.