When starting a business you need to recognise your legal duties towards customers. From the outset, make sure you are aware of consumer legislation, which affects both goods and services.
Selling products
There are laws that protect consumers against unfair selling practices and unscrupulous vendors. Wherever your business operates, you need to understand the rights your customers enjoy under national and local laws. These rulings are encompassed not just in consumer legislation but also, for example, in food safety and electronics labelling laws.
In some countries, such as the USA and Australia, individual states apply their own rules in addition to national law. Legislation can even be shared between nations, as it is for the European Union.
There are also increasing efforts to internationalise consumer laws, particularly because of global trade particularly from online businesses. The International Consumer Protection and Enforcement (ICPEN), for example, works to ensure the minimum standards of consumer protection for cross-border purchases.
Providing services
Consumer rights apply just as much to services, such as plumbing, hairdressing and building, as they do to products.
If you provide a service, you need to be aware of laws that demand certain basic standards, including reasonable care and skill, binding contracts, specified pricing and delivery with an agreed timeframe. If you fail to deliver your service to the agreed standards, you may have to repeat services or provide full compensation to your clients.
A knowledge of consumer rights will highlight what protection you may need against any legal action, such as product liability insurance. It will also help you to meet your customers’ expectations.
Expert Entrepreneur Advice
“Customer service should not be a department within your business, it should be the entire company.”
A customer’s basic consumer rights
Government bodies and consumer watchdogs groups firmly defend consumer rights and will investigate unresolved complaints against businesses.
Before you start trading, check local and national government websites or consumer-championing organisation websites, for guidance and information relevant to your business type.
Rights will vary from country to country, but are likely to cover the same fundamentals of buying goods or services – quality, being fit for purpose, delivery, returns and repairs.
If you sell handbags, for example, you would have to meet consumer rights in all of the following areas:
Delivery
You are responsible for your goods until they reach your customer’s hands. If there are delivery problems, you will have to deal with them, even if the fault lies with your courier. You’ll likely be able to get compensation from the courier, if problems occur, after you’ve solved the problems for your customer.
Quality
The goods you sell should be as described and of good quality – i.e not faulty or damaged. A “100% natural leather bag”, for example, must not contain any synthetic materials.
Returns
If an item is not fit for purpose, a customer can demand a refund or replacement within a certain number of days (usually within 14 days from receipt of the goods).
Fit for purpose
Your goods must be fit for purpose and meet reasonable customer expectations. For example, a laptop bag should be able to hold a laptop securely.
Repairs
If an item develops a fault, you should honour the customer’s right to repair or replace the faulty item. A bag that has lost its stitches will need to be repaired free of charge within a specific timeframe.
