Returns, Rejections and Withdrawal Policy Notice

According to § 355 German Civil Code (Bürgerliches Gesetzbuch) a consumer, i.e. an individual acting in a private capacity, is entitled to withdraw from an agreed goods or services contract. This applies to all distance contracts, for example by telephone and internet, and therefore to all purchases made via eBay or Amazon.

In contrast to purchasing goods in a shop, a consumer buying online is not in a position to assess the goods in person before buying them. Where the goods are undamaged, a consumer is entitled to withdraw from a goods contract without giving a reason and demand reimbursement of the purchase price. In Germany the deadline to withdraw from a goods contract is usually 14 days. The same rights apply to contracts for services, as long as the service has not yet been utilised.

As an alternative to consumers withdrawing from a contract, a company may grant its customers the right to return the goods. The advantage to granting this right, unlike the right to withdraw from a goods contract, is that it can only be exercised where goods are returned within a given deadline. The disadvantage of granting this right however, is that where the value of the goods is below €40 it cannot be agreed that the customer bear the cost of returning the goods.

Which legal provision is more advantageous can only be decided on a case-by-case basis, whilst taking into consideration the goods involved.

A business must ensure that it informs and gives notice to its customers, and in particular to its internet customers, of their rights to withdraw from the contract in accordance with § 355. Although the task sounds simple, it can quickly become complicated. This is reflected in the number of warning letters sent by competitors or competition associations which assert that an incorrect withdrawal, returns or rejections notice infringes on competition rules under § 4 No. 11 and § 5a UWG (Unfair Competition Act).

A legally approved model withdrawal notice has been available since 11.6.2010 and a company making use of such a notice cannot be sent warning letters for any errors in the notice. Deciding to modify this model notice can be an extremely onerous task as there are strict rules as to how the text can be modified. This becomes apparent upon reading Annex 1 to Article 246 § 2 subsection 3, sentence 1 EGBGB (Introduction to the German Civil Code).

Warning letters are increasingly being sent for infringements in this area. Examples of mistakes most often made include: incorrect use of the so-called €40 clause, citing obsolete legislation, providing a telephone number and providing incorrect information as to when applicable time limits start.

Where a company decides to grant its customers the right to return goods, it must ensure that its customers are given notice of this fact. In some circumstances modified or additional terms and conditions may be needed.

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Christian Solmecke is a partner at the law firm WILDE BEUGER SOLMECKE. He is the author of numerous legal publications in the area of internet and IT law. He is also an associate lecturer for social media law at the Cologne University of Applied Sciences.

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