The European Parliament has recently approved an amended Consumer Rights Directive that means online retailers will face extra costs for returns

Why are we talking about it?

An updated version of the EU Consumer Rights Directive (CRD) was approved by the European Parliament last week. The Directive, which aims to harmonise existing EU consumer law, includes some radical amendments to change sales, delivery and returns rules, which have outraged etailers.

What are the controversial changes?

Retailers will be forced to pay for return shipping costs for unwanted items over e40 (£35). More than 30% of clothes ordered over the internet are returned according to etail trade body IMRG, which warns the figure will spiral when the new directive is implemented. The period retailers have to refund a customer will also be slashed from 30 days to 14 days, cutting the time to check returned stock.

The legislation also forces retailers to sell to consumers in every EU country, regardless of whether it has the infrastructure set up to do this cost-effectively.

How will this impact retailers?

IMRG has predicted that these changes will collectively cost retailers £8.8bn per year, which amounts to 4% of the total European online consumer spend.

The group warns that some smaller internet retailers could be forced out of business. IMRG says it is inevitable that retailers will pass the extra operational costs onto shoppers, which will erode internet retailing’s price-competitiveness
and efficiency.

IMRG chief executive James Roper says: “These new amendments are some of the most disastrous for the online industry yet. As well as being unnecessary they would inevitably lead to significant price increases being forced onto already hard-pressed consumers, pushing up prices across all retail channels.”

When will the CRD come into force?

A final vote to approve the legislation is scheduled across all individual EU countries in late spring. If given the green light the directive is expected to come into force in 2012.

Is anything being done to stop it?

IMRG has penned a letter to the European Parliament demanding the withdrawal of the contentious amendments it says will have a “highly detrimental effect” on ecommerce.

The letter is signed by 371 of its members including heavyweights Marks & Spencer, Boots and Play.com. It is working in conjunction with its counterparts in France Germany, Belgium, Spain and the Netherlands to halt these changes.