Delivery and insurance for online transactions

In the current economic climate Brits are learning fast that one person’s junk is another person’s treasure.

According to Ebay, the average UK household is sitting on £450 of untapped Christmas spending money, and recent research from American Express found that 72 per cent of Brits surveyed intend to cash in on this and sell unwanted goods on websites such as Ebay and Amazon.

But whether you are selling or bagging that bargain, give a thought to delivery ­ – how are these goods going to be delivered, and what protection do you have if something gets lost in the post? Get this wrong and you could be out of pocket.

In this issue, we’ll take a look at the rights and responsibilities of both the buyer and the seller.

Sole trader or individual?
Our Consumeractive inbox is full of woeful tales from buyers and sellers who have ignored the issue of who is responsible for goods that go missing or get damaged during transit.

While online sites such as Ebay have their own compensation and dispute schemes, these are not infallible. If you are a business or a sole trader then you have to abide by statutory consumer law, which includes the Distance Selling Regulations (DSRs) if they apply to a sale.

Although the DSRs don’t apply to auctions, if you sell something using a ‘Buy it Now’ facility this is considered a normal sale and the DSRs will apply.

Many sole traders are unaware that items are shipped at their own risk; buyers should not charge insurance. If lost or damaged en route, the seller is responsible for replacing the item or refunding the buyer.

If you are selling as a private individual to another private individual, just like a sole trader, you can legitimately charge for the postage cost (i.e. the stamp), any packaging materials and a reasonable handling cost.

However, you are not bound by the DSRs, so the question of who pays for the insurance is not as clear cut. It is the seller’s responsibility to ensure the goods get to the buyer.

In this scenario, the seller can include insurance fees in the cost, but the buyer can refuse to pay – ­ if they do, the seller can cancel the transaction or proceed with the sale.