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Delivery charges - new requirement for transparency

The Committee of Advertising Practice (CAP) has released new guidance on delivery charges for items ordered online.

The guidance is linked to CAP's Enforcement Notice on Advertised Delivery Restrictions and Surcharges, which for the first time gives its enforcement agency, the Advertising Standards Authority (ASA), the ability to carry out targeted enforcement for noncompliance.

With internet shopping continuing to increase in popularity, there will be a greater risk for retailers to fall foul of the rules around delivery charges. It is therefore important for retailers to be aware of what is, and what isn’t, considered acceptable.

What does the new guidance say?

The new guidance covers delivery charges for goods. The overriding point is that statements made at point of sale must not confuse consumers and must allow them to make an informed purchasing decision. The rule of thumb is that if it would be misleading to omit information on delivery costs, they should be included. CAP does recognise that different situations will call for a different approach, and considers the classifications below to be the appropriate way to advertise delivery charges in specific situations:

  • If the delivery charges apply per product, and the consumer cannot purchase the product without paying those charges, then the cost should form part of the product price.
  • When charges apply per order, retailers must state that charges apply and display the cost of delivery in a prominent qualification. Delivery charges that are revealed only at checkout stage are unlikely to comply.
  • Absolute claims such as 'Free UK delivery' or 'Free delivery on all orders' can only be made if this is explicitly the case. CAP does not consider exclusion qualifications to clarify absolute claims, so if consumers have to spend a certain amount to qualify for free delivery, this must be made clear in the headline claim itself.
  • The CAP guidance recognises that it is not always possible to know the delivery costs in advance. In these cases, it must be made clear on product pages that delivery charges are applicable, and how these are calculated must be explained.
  • CAP makes it clear that retailers must take care when suggesting that a delivery charge covers the entirety of the UK. If certain geographical locations do not qualify for delivery, or incur an extra charge for delivery, this must be made clear in the headline claim, and not just within terms and conditions or qualifications.

The guidance also confirms a previously stated CAP position that items cannot be described as free if a consumer has to pay for packaging, handling or administration. The guidance also warns that the ASA is likely to take a dim view on inflated delivery prices, as this can make the overall product price claim misleading.

The CAP Enforcement Notice and what this means for retailers

The notice requires relevant parties to take 'immediate action to ensure advertising complies.' If after CAP's deadline of 31 May 2018, the ASA finds that any party continues to be non-compliant, they are prepared to take enforcement action, which in the worst case would mean referral to Trading Standards.

This marks a new approach from CAP and the ASA, and increases the level of risk that retailers face. The traditional approach would previously have been to act on a consumer complaint. The Enforcement Notice raises the possibility of the ASA seeking out retailers, regardless of whether a complaint has been made.

The Enforcement Notice forms part of an initiative by the Consumer Protection Partnership which comprises the Department for Business, Innovation and Skills, CMA, Trading Standards, Citizens Advice as well as the ASA, CAP and BCAP.

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at April 2018. Specific advice should be sought for specific cases. For more information see our terms & conditions.

 

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