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Government guide for online marketplace trading aims to protect consumers


9th Jul 2019 Managing your Money

Government guide for online marketplace trading aims to protect consumers

With counterfeit goods on the rise and an increase in fraud, online marketplace traders find themselves in a state of flux. On the one hand, platforms such as Etsy, Amazon Marketplace and eBay are thriving, accounting for over half of all online sales worldwide, while on the other hand, consumer confidence is wavering due to a lack of trust. Given that anyone can sell goods online, consumers are naturally wary of who they do business with. Those who sell on online marketplaces as a business (known as ‘traders’) need a way to stand out from the crowd and build a strong reputation. One way to achieve this, of course, is to use the advantage of economies of scale to offer deals and discounts. However, such quick fixes only go so far, especially as low prices can sometimes give an adverse impression

Earning trust

A more sustainable, long-term route to generate and maintain goodwill is to run a transparent, reliable service on a foundation of legal compliance and full protection of consumer rights. To help traders in this respect, 

Business Companion – a free online resource produced by the Chartered Trading Standards Institute (CTSI) – in partnership with the department for Business, Energy and Industrial Strategy (BEIS) have a Business in Focus guide for selling on online platforms, focusing on traders’ legal obligations. 

The guidance starts at the beginning, by breaking down what sort of sellers the rules apply to. Specifically, it defines who counts as a trader, clarifies the difference between selling to businesses and selling to consumers, and spells out the importance of a buyer’s geographical location. In the context of this advice, it’s worth noting that each marketplace will have its own bespoke rules for all of the above, but these are purely for internal purposes – the information in the guide is based on the law, and is therefore universal.

The right side of the law

Following on from this, the guide explores what cancellation rights  consumers have, and lists exceptions to these, helping traders to recognise when they are legally obliged to take a financial hit in order to ensure compliance and maintain an honest reputation. There’s also a detailed list of pre-contract requirements, which include what information traders must provide, and a set of frequently asked questions with examples that preempt a number of common difficulties traders might face.

As well as primarily retail legislation, the guidance draws on and explains the various trading standards regulations that apply to online marketplace sales, including provisions that protect consumers from misleading descriptions, aggressive practices, unlawful surcharges and unsafe products. This equips traders with the knowledge they need to meet their common law duties as well as their statutory ones. Finally, there’s a checklist download that summarises the key information traders need to know before selling on online marketplaces, including the trader test, information requirements, and cancellation rights.

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