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Proposed EU directive could cost £8.8bn: IMRG

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James Roper, CEO and Founder of IMRG

Draft amendments to the EU’s Consumer Rights Directive could cost online retailers an estimated £8.8bn in delivery charges, says the IMRG.

The organisation, which is the trade body for ecommerce retailers, estimates that if the amendments become part of the final legislation it will cost internet traders €10bn (£8.8bn) or 4% of the estimated European ecommerce market in 2012 in funding the cost of returns – and that inevitably that cost will be passed on to consumers.

It calculates that without the new EU legislation, returns across the EU currently cost etailers about €5.7bn (£5bn) a year, based on the premise that 90% of returns are domestic and 10% cross-border in the EU. The new EU legislation would, it says, see that figure rise to €15.7 billion (£13.9bn).

The IMRG is campaigning against the four parts of the proposed legislation. Article 17 doubles the length of time in which the consumer can change their mind on a purchase to 14 days, and also requires retailers to cover the cost of returns worth more than €40. Article 16 requires that a refund be made within 14 days, rather than the current 30 days.

Article 12 gives the consumer 14 days to tell the trader they are going to return goods for a refund, while Article 22a allows a consumer to require a retailer anywhere in the EU to sell to them, a move the IMRG has said would damage retailers.

IMRG chief executive James Roper said: “These new amendments from the EU 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, and disadvantaging small and medium-sized businesses to the point where many would be forced to cease trading online altogether.”

The legislation, including draft amendments, is now subject to negotiation between the European Parliament and the Council of Ministers before it becomes law.

EU Justice Commissioner Vivane Reding has said the new rights would increase consumer protection by eliminating hidden charges and costs on the internet, and “will bring tangible benefits to consumers and businesses.”

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