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Written by ICF (on behalf of the
Consumer Policy Evaluation Consortium) in association Civic Consulting, Grimaldi Studio Legale and Ipsos Mori
March 2017
Justice and Consumers
Study on the costs and benefits of minimum harmonisation under the
Consumer Sales and Guarantees
Directive 1999/44/EC and of
potential full harmonisation and
alignment of EU rules for different sales channels
EUROPEAN COMMISSION
Directorate-General for Justice and Consumers
Directorate E — Consumers
Unit E.2 Consumer and marketing law
Contact: Magnus Noll-Ehlers
E-mail: [email protected]
European Commission
B-1049 Brussels
Written by ICF (on behalf of the
Consumer Policy Evaluation Consortium) in association Civic Consulting, Grimaldi Studio Legale and Ipsos Mori
March 2017
Justice and Consumers
EUROPEAN COMMISSION
Directorate-General for Justice and Consumers
Rights, Equality and Citizenship Programme – Consumer Rights
March, 2017 EUR 2017.2801 EN
Study on the costs and benefits of
minimum harmonisation under the
Consumer Sales and Guarantees
Directive 1999/44/EC and of
potential full harmonisation and alignment of EU rules for different
sales channels
5
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This document has been prepared for the European Commission however it reflects the views only of the authors, and the Commission cannot be held responsible for any use which may be made of the information contained therein.
More information on the European Union is available on the Internet (http://www.europa.eu).
Luxembourg: Publications Office of the European Union, 2017
PDF ISBN 978-92-79-66964-4 doi:10.2838/045737 DS-02-17-301-EN-N
© European Union, 2017
Reproduction is authorised provided the source is acknowledged.
6
Table of Contents
Abstract ........................................................................................................... 7 Résumé ............................................................................................................ 8 1 Introduction ................................................................................................ 9
1.1 Background to the study ............................................................... 9 1.2 Aims of the study ........................................................................10 1.3 Key concepts and definitions used in this Study ..............................10 1.4 Source of evidence for the study ...................................................11 1.5 Structure of this Report ................................................................17
2 The current situation: minimum harmonisation and its impacts .........................19
2.1 National transposition of the Consumer Sales and Guarantees Directive
.................................................................................................19 2.2 The impacts of national rules going beyond the Directive .................22 2.3 Impact on the single market and cross-border activity .....................38
3 Impacts of potential policy options ................................................................43
3.1 No EU policy action: differentiation between rules for face-to-face
and distance sales of goods ..........................................................43 3.2 Potential impacts of alignment and full harmonisation ......................47 3.3 Impact on cross-border activity and the Single Market .....................60 3.4 Summary and conclusion .............................................................62
Annex 1 Further data of the legal framework in Member States and
case law findings .........................................................................65 Annex 2 Analysis of consumer detriment ....................................................70 Annex 3 Business interviews analysis .........................................................78 Annex 4 Business interviews questionnaire ............................................... 116 Annex 5 Additional data tables for business interviews ............................... 127
7
Abstract
The study is part of the ongoing Fitness Check of EU consumer and marketing law,
focusing on the Consumer Sales and Guarantees (CSG) Directive 1999/44/EC which is a
minimum harmonisation Directive. The study assessed the costs and benefits of Member
States going beyond the minimum rules laid down by the Directive, as well as the
impacts of potential full harmonisation and alignment of EU rules for different sales
channels (distance versus face-to-face sales channels). It specifically focused on four
elements of the CSG Directive, namely, the two-year legal guarantee (longer in five
Member States), notification obligation within a specific period (not applicable in seven
Member States), the six-month period for the reversal of burden of proof (longer in three
Member States) and a free choice of remedies (applicable in five Member States) as
opposed to a hierarchy. The study finds strong benefits of alignment of the rules for face-
to-face and distance sales. Impacts of harmonisation and alignment are likely to vary
across Member States. Alignment of rules for face-to-face and distance channels and full
harmonisation would have an overall positive impact on consumers and businesses in the
Single Market.
8
Résumé
L'étude s'inscrit dans le cadre du «bilan de qualité» en cours du droit européen de la
consommation et de la commercialisation, se concentrant sur la directive 1999/44/CE
relative à la vente et aux garanties des biens de consommation (VGC), qui est une
directive d'harmonisation minimale. Cette étude a évalué les coûts et bénéfices des États
membres allant au-delà des règles minimales définies par la directive ainsi que les
impacts d'une éventuelle harmonisation complète et d’un alignement des règles
européennes pour différents canaux de vente (vente à distance par opposition à la vente
directe). Elle s'est concentrée plus particulièrement sur quatre éléments de la directive
VGC, à savoir la garantie juridique de deux ans (plus longue dans cinq États membres),
l'obligation de notification pendant une période spécifique (non applicable dans sept États
membres), la période de six mois pour renverser la charge de la preuve (plus longue
dans trois États membres) et le libre choix du mode de dédommagement (applicable
dans cinq États membres) par opposition à une hiérarchie. L'étude révèle des avantages
considérables à l'alignement des règles pour la vente directe et la vente à distance. Les
impacts de l'harmonisation et de l'alignement sont susceptibles de varier parmi les États
membres. L'alignement des règles pour les canaux de vente directe et à distance ainsi
que l'harmonisation complète auront un impact globalement positif sur les
consommateurs et les entreprises du marché unique.
9
1 Introduction
This study analyses the costs and benefits of implementation of the Consumer Sales and
Guarantees Directive by Member States, focusing specifically on the costs and benefits of
national rules going beyond the minimum rules set by the EU Directive. It then looks at
the potential impacts of full harmonisation of certain key consumer rights and the
possible alignment of EU rules for face-to-face sales with those proposed by the
European Commission for distance sales of goods.
Box 1.1 Overview of the Consumer Sales and Guarantees (CSG) Directive
1999/44/EC
The Consumer Sales and Guarantees (CSG) Directive 1999/44/EC, which came
into force in 2001, aims to provide consumers across the EU with a minimum
level of protection by laying down a minimum set of rules on conformity with
contract and a set of remedies in case a good turns out to be faulty or not in
conformity with its description. These, inter alia, include:
A two year legal guarantee period which makes the seller liable for any
defect in goods that existed at the time of delivery and becomes
apparent within two years from delivery;
A hierarchy of remedies: as a first step, consumers can ask for repair or
replacement of defective goods (first tier remedies), followed by price
reduction or full refund / termination of contract (second tier remedies);
and
Reversal of burden of proof during first six months of purchase, i.e. for
the first six months after the delivery it is presumed that the fault
existed already at the time of delivery, unless the seller proves that it
did not exist at that point.
The CSG Directive applies to the sale of tangible consumer goods, both new
and second hand1, and regardless of the sales channel (distance or face-to-face
sales channels). It is a minimum harmonisation directive and as such, several
Member States have gone beyond the minimum requirements set by the
Directive by introducing more stringent rules.
1.1 Background to the study
The Commission's 2010 Communication on Smart Regulation2 introduced 'fitness checks'
as comprehensive policy evaluations assessing whether the regulatory framework for an
entire policy area is proportionate, fit for purpose, and delivering as expected. As such,
the key elements of a fitness check are:
To identify excessive administrative burdens, overlaps/ gaps/ inconsistencies
between different pieces of legislation in the same policy area) or obsolete
measures which may have appeared over time;
To estimate the cumulative impact of legislation in a particular policy area;
To identify areas for potential simplification.
This Study will feed into the ongoing fitness check of the EU horizontal consumer
legislation, for which the following pieces of legislation are being examined:
Directive 93/13/EEC on unfair terms in consumer contracts (Unfair Contract Terms
Directive).
1 However, Member States may reduce the legal guarantee period to one year for second-hand goods.
2 COM(2010) 543 final - Smart Regulation in the European Union, 8 December 2010
10
Directive 1999/44/EC on certain aspects of the sale of consumer goods and
associated guarantees (Consumer Sales and Guarantees Directive);
Directive 2005/29/EC concerning unfair business-to-consumer commercial
practices in the internal market (Unfair Commercial Practices Directive).
Directive 98/6/EC on consumer protection in the indication of the prices of
products offered to consumers (Price Indication Directive);
Directive 2006/114/EC concerning misleading and comparative advertising
(Misleading and Comparative Advertising Directive);
Directive 2009/22/EC on injunctions for the protection of consumers' interests
(Injunctions Directive).
In December 2015 the European Commission proposed a Directive on online and other
distance sales of goods which, if adopted, would replace the rules of the Sales and
Guarantees Directive in respect of distance sales of tangible goods (in particular, online
sales, but also sales by telephone and mail order catalogues etc.). At the same time, the
Commission’s proposed Directive on contracts for the supply of digital content introduces
rules on conformity and remedies for defective digital content, which are not currently
regulated in EU legislation, as well as certain new rules regarding modification of
contracts, and termination of long-term contracts for the supply of digital content and
modalities of consumer remedies.
1.2 Aims of the study
The Terms of Reference set out the following objectives for this Study:
To determine the impact of the minimum harmonisation rules under the Directive
on face-to-face sales of goods under the Consumer Sales and Guarantees
Directive 1999/44/EC;
Whether minimum harmonisation under this Directive represents a barrier to
cross-border trade through face-to-face channels; and
To determine the costs and benefits of full harmonisation and alignment of EU
rules for face-to-face sales different sales channels (offline and to those proposed
for distance sales) – see box below.
Box 1.2 Overview of the Commission’s proposal for a Directive on
online and distance sales of goods
1.3 Key concepts and definitions used in this Study
The term “face-to-face sales” or “offline sales” in the context of this Study refers to
sales made in a physical i.e. ‘brick and mortar’ shop or off-premises sales in the sense of
3 COM(2015) 635 final - Proposal for a Directive of the European Parliament and of the Council on certain aspects concerning contracts for the online and other distance sales of goods. Available at: http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52015PC0635&from=EN
In December 2015, the Commission proposed a full harmonisation Directive for online and
other distance sales of goods3. As the title suggests, the proposed Directive only covers distance sales channels, in particular e-commerce (online sales), mobile commerce, mail (postal) orders, and telesales / call centre (e.g. phone sales, TV shopping). Goods sold via face-to-face channels (i.e. in a physical shop or doorstep-selling) do not fall within the scope of the proposed Directive.
The Directive proposes to fully harmonise the following key mandatory rights and obligations
of the parties to a contract for online and other distance sales of goods:
A two year legal guarantee period (as under the CSG Directive);
Removal of the notification obligation within a specific period: the CSG Directive
currently allows Member States to introduce a time-limit (no shorter than two months)
within which a consumer who detects any defect has to inform the seller (Article 5).
Directive. That possibility for Member States would be removed if the new Directive
were to be adopted as proposed by the Commission;
Extension of the timeframe for the reversal of burden of proof for the fact that the
defect existed at the time of delivery from six months (under the CSG Directive) to two
years; and
Hierarchy of remedies (as under the CSG Directive).
11
Article 2 (8) of Directive 2011/83/EU on consumer rights, including doorstep-selling and
sales made during promotional excursions. However, the focus of this Study is clearly on
physical shops.
The term “distance sales” encompasses e-commerce (online sales), mobile commerce,
mail (postal) orders, and telesales / call centre (e.g. phone sales, TV shopping)
As regards sales with a cross-border element, this Study looks firstly at possible
obstacles faced by retailers willing to sell their goods via face-to-face channels in another
Member State (e.g. by opening a shop in another Member State) and secondly, at the
factors deterring consumers from buying goods from shops in other Member States.
1.4 Source of evidence for the study
This Study is based on evidence collected from a range of sources:
Desk research;
Computer-assisted telephone interviewing (CATI) with micro, small and medium-
sized retailers in 15 Member States;
An online survey of large retailers;
Semi-structured interviews with EU-wide umbrella associations of consumers,
retailers and businesses;
Semi-structured interviews with national stakeholders; and
Open Public Consultation on the fitness check, including on Directive 1999/44/EC.
In view of time and budget constraints, primary data collection activities undertaken in
the context of the present Study were limited to a representative sample of Member
States as shown in Figure 1 below.
12
Figure 1. Overview of countries selected for primary data collection activities
1.4.1 Desk research
Desk research consisted of three components as follows:
Legal mapping;
Literature review; and
Analysis of statistical and survey data.
1.4.1.1 Legal mapping
The following sources were used to map out how the key provisions of the CSG Directive
have been transposed into national law:
13
The 2015 Consumer Market Study on Legal and Commercial Guarantees4;
Consumer Law Compendium5;
Notifications from Member States to the Commission under the Consumer Rights
Directive (2011/83/EU) on the points where they have gone beyond the CSG
Directive6; and
The 2016 Study on all mandatory rules applicable to contractual obligations in
contracts for sales of tangible goods sold at a distance and, in particular online7.
1.4.1.2 Literature review
Relevant evidence on the benefits, costs (legal, compliance and other), barriers to
traders and consumers of the current regulatory framework was extracted from the
following sources:
Impact Assessment for the Proposal on online and other distance sales of goods;
Impact Assessment for the Proposal on a Common European Sales Law (CESL);
Impact Assessment for the Proposal of the Consumer Rights Directive;
European Parliament, A Longer Lifetime for Products: Benefits for Consumers and
Companies (2016);
Relevant – though limited – sources at national level, including reports and data
from France (UFC QueChoisir, a business association), the Netherlands (disputes
and complaints from de Geschillencommissie) and the UK (Which?), though
evidence at national level is rather scant;
The 2015 Consumer Market Study on Legal and Commercial Guarantees.
1.4.1.3 Analysis of statistical and survey data
Quantitative data was drawn from the following sources:
Eurostat statistics on the number of retailers (NACE Rev 2 G47) and population;
Microdata of Flash Eurobarometer 359 "Retailers' attitudes towards cross-border
trade and consumer protection" (2013);
Microdata of Flash Eurobarometer 396 "Retailers' attitudes towards cross-border
trade and consumer protection" (2015);
Microdata of the consumer survey carried out as part of the 2015 Consumer
Market Study on Legal and Commercial Guarantees;
Microdata of the ongoing Consumer Market Study to Support the Fitness Check of
Consumer Law – see box below.
Box 1.3 Approach to consumer detriment analysis using microdata from the ongoing
Consumer Market Study to support the Fitness Check of Consumer Law (Lot
3)
The Consumer Market Study survey covers all 28 Member States plus Norway and Iceland. Overall 23,501 EU consumers replied to questions related to their purchasing habits through face-to-face and distance channels, the incidence of problems with
defective goods, awareness of consumers' rights, consumers' views on remedies as well as action taken/remedies received for defective goods.
4 DG Justice and Consumers, “Consumer market study on the functioning of legal and commercial guarantees for consumers in the EU” (December 2015),). The study is available at the following link: http://ec.europa.eu/consumers/consumer_evidence/market_studies/docs/legalguaranteesfinal_report_en.pdf
5 Website: http://www.eu-consumer-law.org/index_en.cfm, complete study: http://www.eu-consumer-law.org/consumerstudy_full_en.pdf
6 DG Justice and Consumers, “Notifications according to Article 32 and 33 of the CRD” : "http://ec.europa.eu/consumers/consumer_rights/rights-contracts/directive/notifications/
7 Available at: http://ec.europa.eu/justice/contract/files/final_report_study_on_all_national_mandatory_rules_applicable_to_contracts_for_sales.pdf
14
We used the microdata from the survey to construct the following indicators of consumer detriment:
Incidence of problems relating to defective goods i.e. share of
respondents experiencing problems relating to defective goods;
Share of relevant respondents receiving redress;
Net financial detriment – Gross financial detriment less the monetary
value of any remedies received; and,
Other costs - The amount of time and money spent by consumers as a
consequence of the problem relating to defective goods8 (administrative
follow-up, legal follow-up and product follow-up costs).
Responses were isolated for consumers buying goods through face-to-face channels.
We then analysed the relationship between the level of consumer protection provided by national legislation and consumer detriment as measured by the above indicators using bivariate regression technique. This statistical method allows us to test if two variables are associated. If the outcome of such test is positive (i.e. the results are statistically significant), then it means that the association between the two variables is caused by something other than random chance. Hence a bivariate regression can provide a quick
and useful first insight on the relationships between any two variables. This method however, does not describe causality between variables (i.e. the influence of one variable over the other or vice versa).
Annex 2 explains the concept of consumer detriment and provides further information on the specific survey questions that were used for the analysis and how the above
indicators were derived.
1.4.2 Business interviews
Structured interviews (using CATI) were conducted with 375 retailers in 15 Member
States to collect evidence on (i) the costs and benefits of national rules currently going
beyond the Directive and (ii) the potential impacts of the various legislative changes
being considered by the Commission. The survey was targeted at persons with decision
making responsibility within the business (e.g. Owner, General Manager,
Commercial/Sales Manager etc.). The sample of 375 retailers was randomly drawn from
the Dun and Bradstreet database, ensuring adequate coverage by country and sub-
sector. A sample size of 375 gives a margin of error of approximately 5% at a 95%
confidence level. As such, the sample is representative of the sub-population it was
drawn from. It cannot however, be determined the extent to which the sample is
representative of the entire population of EU retailers as data on population
characteristics (e.g. sizeband, sub-sector) are not available. It should be noted that the
survey was designed to corroborate and build on the qualitative evidence collected from
other sources. The results at Member State level should however, be treated with caution
as convention dictates that a minimum sample size of 30 is required for quantitative
analysis.
The sample consisted of 185 micro enterprises (49% of the sample); 153 small
enterprises (41%) and 37 medium-sized enterprises (10%). For the purposes of this
study the size of the enterprises is based on the number of employees. This was for
micro enterprises to have between 1 and 10 employees, small enterprises between 10
and 50 employees and medium-sized enterprises between 50 and 250 employees.
Table 1.2provides a breakdown of business interviews by Member State, while Figure 2
and Figure 3 provide a breakdown of business interviews by demographics. The target
8 It should be noted that data relating to when the bought product is not working before and during repair or replacement was not collected as part of the survey, and can therefore not be assessed in this study.
15
number of interviews could not be reached in the UK, France and Luxembourg due to low
interest among businesses in participating in the Study.9
Table 1.1 Breakdown of business interviews by Member State
Member State No. of target
interviews
No. of
completed
interviews
Completed interviews
as % target as % total
Austria 25 28 112% 7%
Bulgaria 25 31 124% 8%
Finland 25 27 108% 7%
France 25 21 84% 6%
Germany 25 25 100% 7%
Greece 25 26 104% 7%
Hungary 25 26 104% 7%
Luxembourg 25 17 68% 5%
the Netherlands 25 25 100% 7%
Poland 25 28 112% 7%
Portugal 25 31 124% 8%
Romania 25 28 112% 7%
Spain 25 26 104% 7%
Sweden 25 25 100% 7%
United Kingdom 25 11 44% 3%
Totals 375 375 100%
Figure 2. Breakdown of business interviews by sales channel
9 The offer set out the aim of reaching 25 businesses in each of the 15 sample countries and while the total number of 375 was met, the targets for UK, France and Luxembourg could not be reached within the timeframe of the Study.
16
Figure 3. Breakdown of business interviews by size and sales channel
1.4.2.2 Feedback from large retailers
A separate simplified, online version of the CATI-questionnaire was developed to collect
feedback from large retailers. A purposeful sample of 57 large retailers (focusing on
retailers with shops in multiple EU Member States) was drawn for this purpose from a
database10 of 466 large retailers provided by Ipsos. Only 10 complete responses were
received, and 10 partial responses, a sample that is not representative of large retailers.
This information has therefore, only been included in Section 3 in a few instances. The
Study focused on micro, small and medium-sized retailers, but it must be noted,
however, that large retailers contacted appeared not very willing to participate in the
Study.11 This is also due to the approach for large retailers having been an online
survey, which leads to lower response rates than direct phone interviews (as was the
case for the business interviews).12
1.4.3 Wider stakeholder interviews
Wider stakeholder interviews were conducted in 15 Member States, as well as with
European umbrella associations.
1.4.3.1 EU level
At EU-level, the study team reached out to both European consumer associations and
umbrella business associations. Specifically, we consulted BEUC13, Eurocommerce and
Independent Retail Europe.14
1.4.3.2 National level
An overview of consultation process involving relevant stakeholders in 15 Member States
which mostly overlaps with the 15 Member States selected for the business interviews, is
presented in Table 1.2. Overall, from the list of over 135 entities who were contacted in
the period June-September, 63 entities responded to the request. The Study encountered
a certain degree of consultation fatigue, especially among business associations. In all
10 Called OneSource. This was ordered from Dun and Bradstreet. For each country, a random sample of enterprises was selected from the total number of enterprises in the database that reported activities in the relevant SIC codes. Enterprises in the Dun and Bradstreet databases are categorised according to their business activity, following the standard industrial classification (SIC) of economic activities. 11 Two follow-up requests were sent to all survey participants. 12 Such an approach is also hampered by challenges to reach the person in a large enterprise that is able to comment on the elements relevant for this Study. For the business interviews we sought to speak to the person who is able to represent the retailer and scheduled interviews accordingly. 13 From BEUC a position paper on Directive 1999/44/EC was received. 14 The European Retail Round Table and European Community of Consumer Cooperatives decided not to participate. The European Small Business Association (ESBA) decided not to contribute to the study. Other EU-level stakeholders were considered at the inception stage of the study but not considered relevant for full consultation.
17
Member States the two largest business associations representing businesses or retailers
were contacted, but not all of them were able to respond.15
Where stakeholders who did not reply to initial invitation, at least two additional follow-
ups via email and/or phone were made.
Table 1.2 Number of interviews completed with stakeholders at Member State
level
Total Government
authorities,
Enforcement
authorities /
ADR bodies
Consumers
associations
Business
association
ECC Centre
Bulgaria 3 1 1 1
Croatia 5 1 2 1 1
Denmark 5 1 1 2 1
France 5 2 1 1 1
Germany 5 1 1 2 1
Greece 4 2 1 1
Hungary 4 2 1 1
Italy 5 2 1 1 1
Latvia 4 2 1 1
The
Netherlands
6 3 2 1
Poland 4 2 1 1
Romania 4 1 1 1 1
Spain 4 2 1 1
Sweden 5 1 2 1 1
United Kingdom 4 2 1 1
Total 67 25 15 13 14
Note: in a few cases, written responses were provided by stakeholders
1.5 Structure of this Report
The remainder of this document is structured as follows:
Section 2 presents an overview of the current situation in EU Member States, by
mapping national rules going beyond the rules laid out in Directive 1999/44/EC
and discusses the costs and benefits of such national rules; and
Section 3 provides an analysis of the potential impacts of the policy options under
consideration i.e. no EU policy action, alignment of rules for all sales channels and
full harmonisation of EU rules.
15 Some business associations considered they didn’t have enough expertise or information to provide inputs (Bulgaria, Poland), others also consulted their members and were not able to respond on behalf of their members by not having the right mandate (the case for a business association in France and Latvia), or opted not to participate or didn’t reply despite repeated phone calls (Hungary, Greece, United Kingdom).
18
The main report is supported by the following annexes:
Annex 1 provides further details on the legal framework in Member States and
case law findings, building on Section 2.1;
Annex 2 explains the methodological approach to estimation and analysis of
consumer detriment;
Annex 3 summarises the results of the business interviews;
Annex 4 provides the questionnaire for the business interviews;
Annex 5 provides additional data tables for the business interviews.
19
2 The current situation: minimum harmonisation and its impacts
This section describes the current situation with respect to the transposition of the
Consumer Sales and Guarantees Directive. It specifically highlights national rules going
beyond the Directive. It also provides an indication of the costs and benefits of national
rules going beyond the Directive and examines the impact of minimum harmonisation on
cross-border retail activity.
2.1 National transposition of the Consumer Sales and Guarantees Directive
The four main elements related to Directive 1999/44/EC covered in this Study are the
following:
Legal guarantee period;
Obligation to notify the seller of a defect within a certain period of time;
Reversal of the burden of proof;
Hierarchy of remedies.
By way of introduction, Table 2.1 provides an overview of the key articles of
Directive 1999/44/EC.
Table 2.1 Key articles of Directive 1999/44/EC
Relevant article of
the Directive
Relevant parts of the Consumer Sales and Guarantees Directive
Legal guarantee period Art. 5(1)
Art 5(1): 1. The seller shall be held liable under Article 3 where the lack of conformity becomes apparent within two years as from delivery of the goods. If,
under national legislation, the rights laid down in Article 3(2) are subject to a limitation period, that period shall not expire within a period of two years from the time of delivery […]
Obligation to notify seller of a defect within a certain period of time Art 5 (2)
Art.5(2): Member States may provide that, in order to benefit from his rights, the consumer must inform the seller of the lack of conformity within a period of two months from the date on which he detected such lack of conformity.
Member States shall inform the Commission of their use of this paragraph. The Commission shall monitor the effect of the existence of this option for the Member States on consumers and on the internal market.
Timeframe for reversal of burden of proof Art 5 (3)
Art.5(3): Unless proved otherwise, any lack of conformity which becomes apparent within six months of delivery of the goods shall be presumed to have existed at the time of delivery unless this presumption is incompatible with the nature of the goods or the nature of the lack of conformity
Approach to remedies – hierarchy versus choice Art.3) and time period for providing a remedy Art.3 (3)
Art.3: 1. The seller shall be liable to the consumer for any lack of conformity which exists at the time the goods were delivered.
2. In the case of a lack of conformity, the consumer shall be entitled to have the goods brought into conformity free of charge by repair or replacement…or to have an appropriate reduction made in the price or the contract rescinded with regard to those good […]
3. In the first place, the consumer may require the seller to repair the goods or he may require the seller to replace them, in either case free of charge, unless this is impossible or disproportionate[…]
Any repair or replacement shall be completed within a reasonable time and without any significant inconvenience to the consumer, taking account of the nature of the goods and the purpose for which the consumer required the goods.
As regards the transposition of the Directive, the main points to note are as follows:
The CSG Directive allows Member States to oblige consumers to notify the seller of
a defect within two months of detection of lack of conformity (Article 5). While
20
most Member States (21) have transposed this optional provision into their
national legislation, seven Member States (see table below) do not have a
notification obligation in their national legislation.
Five Member States have a longer guarantee period than provided for in the
Directive. Sweden has a guarantee period of 3 years. In the Netherlands, products
must be delivered to the consumer in conformity with the agreement but without a
defined cut-off or time-limit. Instead, the duration of the legal guarantee period is
based on the duration of the expected average life-span of the product. Also in
Finland, the legal guarantee is based on the expected lifespan of the product. In
the United Kingdom and Ireland consumers can claim a remedy for a faulty good if
that fault becomes apparent within its expected lifetime, within a limitation period
of up to 6 years (5 years in Scotland; 6 years in England, Wales and Northern
Ireland).
Three Member States (France, Poland and Portugal) have a longer time period for
the reversal of the burden of proof than the six months stipulated in the CSG
Directive.
In five Member States, consumers enjoy a free choice of remedies. In two Member
States (UK and Ireland), consumers can return a faulty good and get a full refund
in the first 30 days of purchase (known as the “short term right to reject”). The
trader pays the cost of returning the goods and a refund must be processed within
14 days.
Table 2.2 shows how the key provisions of the CSG Directive have been transposed into
national legislation. Member States with national rules going beyond16 the Directive have
been highlighted in green cells.
Table 2.2 National transposition of the Consumer Sales and Guarantees
Directive
Member States
Key provisions of the CSG Directive
Duration of legal
guarantee (years)
Notification obligation on consumers
Reversal of burden
of proof period Hierarchy of
remedies
Austria 2 No 6 months Yes
Belgium 2 Yes17 6 months Yes
Bulgaria 2 Yes18 6 months Yes
Croatia 2 Yes 6 months Free choice
Cyprus 2 Yes 6 months Yes
Czech Republic 2 Yes19 6 months Yes
16 On grounds of simplicity the lack of a notification obligation is included in this category, although strictly speaking the Directive does not provide for a notification obligation and rather allows Member States to include a notification obligation.
17 The trader and the consumer may agree that the lack of conformity has to be notified by the consumer within two months since he became aware of it. Wet betreffende de bescherming van de consumenten bij verkoop van consumptiegoederen/Loi relative à la protection des consommateurs en cas de vente de biens de consummation (2004), see:
http://www.ejustice.just.fgov.be/cgi_loi/loi_a.pl?language=nl&caller=list&cn=2004090138&la=n&fromtab=wet&sql=dt=%27wet%27&tri=dd+as+rank&rech=1&numero=1
18 See Article 126 of the Consumer Protection Act. However the existence of that rule was not formally notified to the European Commission.
19 The Czech law indicates “the consumer has to contact the trader without undue delay after discovery of the defect “.Act No. 89/2012 Coll., the New Civil Code (“Nový občanský zákoník", and NCC).
21
Member States
Key provisions of the CSG Directive
Duration of legal guarantee (years)
Notification obligation on consumers
Reversal of burden of proof period
Hierarchy of remedies
Denmark 2 Yes 6 months Yes20
Estonia 2 Yes 6 months Yes21
Finland No fixed time
limit Yes 6 months Yes
France 2 No 2 years Yes
Germany 2 No 6 months Yes
Greece 2 No 6 months Free choice
Hungary 2 Yes 6 months Yes
Ireland 6* No 6 months Yes + short term
right to reject22
Italy 2 Yes 6 months Yes
Latvia 2 Yes 6 months Yes23
Lithuania 2 Yes24 6 months Free choice
Luxembourg 2 Yes25 6 months Yes26
Malta 2 Yes 6 months Yes
Poland 2 No 1 year Yes27
Portugal 2 Yes 2 years Free choice
Romania 2 Yes 6 months Yes
Slovakia 2 Yes 6 months Yes
Slovenia 2 Yes 6 months Free choice
Spain 2 Yes 6 months Yes
Sweden 3 Yes 6 months Yes
20 In Denmark the consumer may claim a refund if the defect is significant, but not if the seller offers to repair or replace the product. Article 78 of the Sale of Goods Act (Købelov): http://www.sprog.asb.dk/sn/Danish%20Sale%20of%20Goods%20Act.pdf
21 The Estonian rules are based on the idea of a free choice of remedy, giving, however, the seller the possibility to deal with the fault by way of repair or replacement.
22 S.I. No. 11/2003 - European Communities (Certain Aspects of the Sale of Consumer Goods and Associated Guarantees) Regulations 2003, http://www.irishstatutebook.ie/eli/2003/si/11/made/en/print
23 Since a legislative change in 2015.
24 Consumer has to notify within a reasonable time, according to Article 6.327 of the Civil Code No. VIII-1864 of 18th July 2000
25 The consumer has to inform the seller about any non-conformity of the product within a “reasonable period” but since this period is not defined, it effectively means two years after the delivery. Under Art. L. 212-6, subparagraph 2 there is a second two-year time-limit for bringing an action to enforce a guarantee; it runs from when the consumer reported the non-compliance of the goods to the trader.
26 Remedies should be carried out within one month by the seller. If this is not the case, the consumer can request a replacement and receive a full refund of the product price, or keep the product and obtain a partial refund. However, the consumer can obtain further price reductions for damages if the consumer can provide proof that the non-conformity of the faulty good created additional costs or was dangerous to health. 27 The Polish rules applicable since December 2014 are based on the idea of a free choice of remedy, giving, however, the seller the possibility to deal with the fault by way of repair or replacement.
22
Member States
Key provisions of the CSG Directive
Duration of legal guarantee (years)
Notification obligation on consumers
Reversal of burden of proof period
Hierarchy of remedies
the
Netherlands
No fixed time
limit Yes 6 months Yes
United
Kingdom
6 (5 in
Scotland)* No 6 months
Yes + short term
right to reject28
*The seller's liability in these Member States is only limited by the prescription
period.
Green shading denotes Member State going beyond minimum standards of
Directive 1999/44/EC.
2.2 The impacts of national rules going beyond the Directive
This section examines the costs and benefits of national rules going beyond the Directive
in the countries where such rules apply. It should be noted, following the information
also provided in section 1.4, that stakeholders were consulted in 15 Member States
selected for this Study.
It should be noted that the views presented here do not represent all stakeholders in all
Member States as several stakeholders either did not respond to our request for
interviews despite repeated follow-ups or declined to participate in the Study (e.g.
Business associations from Bulgaria, Poland and the UK). Among those who replied, a
number of stakeholders consulted were unable to provide detailed answers or
corroborate their views with additional evidence.
2.2.1 Legal guarantee going beyond two years
Member States concerned: Finland, Ireland, Sweden, Netherlands and the
United Kingdom
2.2.1.1 Benefits
There are five Member States going beyond the Directive’s minimum legal guarantee
period of two years. In all of these Member States, the longer guarantee has been in
place for at least a decade.
Stakeholders consulted in three out of these five Member States (Sweden, Netherlands
and the UK) were asked about the specific benefits for consumers of the legal guarantee
period being longer than two years.
A Swedish consumer association explained that the three-year legal guarantee period
that exists in the country benefits consumers by increasing the possibility of obtaining
redress when a product is faulty. Another consumer representative highlighted that in
Sweden, the aim of changing the law and extending the guarantee period in 2005 was to
enhance the durability of consumer products.
In the UK, where the seller's liability is limited by the general prescription period of five
years in Scotland and six years in England, Wales and Northern Ireland, this rule was
considered beneficial for consumers by UK consumer representatives and government
authorities. It was seen by a government authority as boosting consumer confidence.
One UK consumer organisation saw it as particularly beneficial for consumers purchasing
more expensive and durable products (white goods, desktop computers, cars etc.). A
28 Consumer Rights Act 2015, Section 20 on the Right to Reject, see http://www.legislation.gov.uk/ukpga/2015/15/contents/enacted
23
2008 study on consumer detriment commissioned by the Office of Fair Trade (OFT)29
found that most consumer detriment occurs in transactions involving higher value
products (which will often be those which can reasonably be expected to last more than 2
years) and these are precisely the transactions where consumers are generally keen to
pursue disputes long after purchase. None of the interviewed business associations
provided concrete examples of benefits for businesses that have materialised as a result
of the extension of the legal guarantee beyond two years in the Member States
concerned. A UK government authority, however, stated that the increased operational
costs for businesses of longer legal guarantees might be potentially offset by increased
consumer confidence and therefore, increased consumer spending.
For less expensive goods, a longer legal guarantee was seen as providing consumers with
a tool to negotiate an appropriate remedy with the seller. In addition, a UK government
authority and consumer association argued that a longer guarantee period has the
benefit of incentivising producers to design and produce higher quality goods,
discouraging the misuse of ‘planned obsolesce’ by some manufacturers and leading to
less waste and lower replacement costs for consumers and traders.
In the Netherlands, the legal guarantee system is different from Sweden, Ireland and the
United Kingdom, in that it is tied to product life. Government authorities and consumer
representatives in the Netherlands highlighted that the Dutch system was initially seen as
a way to be fair to both consumers and businesses by ensuring that the legal guarantee
matched the reality of the more durable products. In Finland, consumer representatives,
as well as an authority also held that it benefits consumers for certain, more durable and
expensive products.
In assessing impacts of the longer guarantee period on consumers, the study used
microdata from the parallel Consumer Market Study (lot 3) (lot 3)30 to statistically
analyse the relationship between the level of consumer protection provided by national
legislation and various indicators of consumer detriment. This analysis generated the
following results:
There is a statistically significant positive association between the duration of the
legal guarantee period and the occurrence of problems relating to defective goods
as stated by consumers in the survey, i.e. in Member States with longer legal
guarantee periods, consumers are more likely to experience problems relating to
defective goods. Self-reported data on occurrence of the problems experienced by
consumers should however, be interpreted with caution as not only does it depend
on respondent’s ability to accurately recall the frequency of the problems
encountered, but also on cultural factors such as consumer expectations, levels of
empowerment etc.;
There is a statistically significant positive relationship between the duration of the
legal guarantee period and the share of consumers receiving redress i.e. in
countries with longer legal guarantee periods, respondents were more likely to
have obtained redress;
No evidence was found of a statistically significant relationship between the
duration of the legal guarantee period and net financial detriment / the cost of
administrative follow-up;
There is a statistically significant negative relationship between the duration of the
legal guarantee period and the cost of time spent by consumers on resolving
problems i.e. in countries with longer guarantee periods (>2 years), respondents
reportedly spent less time on resolving the problem.
29 OFT, 2008. Consumer detriment. Assessing the frequency and impact of consumer problems with goods and services. Available at: http://webarchive.nationalarchives.gov.uk/20140402142426/http:/www.oft.gov.uk/shared_oft/reports/consumer_protection/oft992.pdf 30 Consumer market study to support the fitness check of the Consumer Law, European Commission, DG Justice and Consumers, forthcoming. The microdata of that study was used to run an in-depth analysis.
24
Inferences from this study should be made with caution. As previously explained, while
the above analysis shows a link between the various variables, it does not indicate
causality. It is therefore, not possible to conclude whether the lower level of consumer
detriment is due to characteristics of the legal guarantee or rather due to other
explanatory factors such as potentially more effective enforcement framework regarding
guarantee rights, a more forthcoming attitude of retailers, or better access to redress in
the countries concerned.
2.2.1.2 Costs
Member States concerned: Finland, Ireland, Sweden, Netherlands and the
United Kingdom
Few studies are available that have assessed the actual cost impacts of the legal
guarantee period going beyond two years. In none of the five countries have these
effects been studied comprehensively.
The only indications provided concern estimated costs of such an extension. Relevant
data is from France, which currently does not have a longer guarantee period. A reported
and identified source of quantitative data is a study conducted by UCF Que Choisir
(French consumer association) which took place between September 2015 and April
201631. According to this study, if the legal guarantee period were extended from two
years to five years, this would lead to a potential increase in consumer prices of 1% to
2.9%.32 The report, however, concluded that an increase in length of the legal guarantee
period could on balance still be desirable for consumers when considering the benefits of
a longer legal guarantee period (such as longer durability of a good, lower costs of
repairs as well as potential environmental benefits and higher pressure on producers of
less durable products, less time spent in dealing with redress procedures), though
conclusive evidence on these impacts is not available. It should be noted that it was a
rather small survey and that these findings alone are not sufficient for estimating the
impacts of a longer legal guarantee period on the prices of consumer goods. What it does
show is that increases in prices could happen for certain products in certain sectors. On
the other hand, a uniform legal guarantee period could potentially create a more level
playing field across the EU and increases in consumer prices could be partially offset by
increased (cross-border) competition.
A French business association further reiterated that an increase of the length of the
guarantee period could lead to an increase in consumer prices.
While potential impacts on prices were thus highlighted in the French context, no such
impacts were alluded to directly by stakeholders in the Netherlands, Sweden and the
United Kingdom – three Member States covered by this Study which have a longer legal
guarantee period. A European business association suggested that the longer guarantee
period could have reduced consumer choice (and consequently their welfare) in countries
where this is currently the case, as some consumers prefer to purchase inexpensive
products which they know will wear out after two years, while others may want to pay
more for durable products, though no evidence was provided to support the claim on
reduced consumer choice. The business association argued that this was particularly
applicable to products such as mobile phones where the technology is rapidly evolving. In
its view, a longer guarantee period would force all products to be upgraded even though
some consumers may have no desire for more durable products.
31 Que Choisir, May 2016. Extension á 2 ans de la garantie légale: une information du consommateur loin d’être garantie!
32 See: http://www.quechoisir-franchecomte.org/Etude%20Garantie.pdf. It should be noted that the methodological explanations are very limited. The key driver for driving up the costs would be additional costs related to the repair
25
Stakeholders from Sweden (consumer and business representatives, and government
authorities) and the United Kingdom (consumer representatives and government
authorities, though no business association opted to participate in the study) did not
indicate any explicitly negative effects (or costs) for consumers tied to a longer legal
guarantee period.
As regards the Dutch system, all stakeholders (business associations, Dutch consumer
representatives and government authorities) noted that a major disadvantage of a legal
guarantee period linked to the expected average life-span of products is that it is too
complex for consumers to understand and for businesses to apply. Anecdotally, this
complexity and lack of understanding of the system has resulted in an increase in
disputes between consumers and traders (which has cost implications for both parties),
according to all stakeholders.
A Dutch business representative stated that the costs resulting from a longer legal
guarantee period could have led to an increase in the operational costs of businesses
(and consumer prices). One respondent from the Dutch business sector indicated that
initially the Dutch system of a legal guarantee linked to product lifespan was thought to
be beneficial and less costly to all parties involved, but it actually turned out to be
complex to understand for businesses (although this understanding has improved over
the years), cumbersome and even costly. The Dutch business representative argued that
retailers most likely need to cover the higher costs of repairs and replacements, also tied
to some products having a legal guarantee of effectively 10 years or more. The Dutch
confederation of Industry and Employers added that the extension of the legal guarantee
has typically had a more negative impact on smaller as compared to larger traders. Yet,
the stakeholder did not possess any quantitative data to back up those views.
Within the same context, the Dutch system of differentiation of the length of legal
guarantee according to product type has not been functioning smoothly according to
another Dutch business association and a Dutch consumer protection authority. They
highlighted that another negative consequence for businesses is that it has led to
extended discussions related to interpretation of the durability of individual products.
While stakeholders were not able to present data on a counterfactual (how the situation
would have been without the differentiated system) but both consumer representatives
and business representatives argued that the system involves comparatively more
disputes and higher case load for arbitration. No quantitative data could be provided by
stakeholders to support the claims regarding increase in disputes and operating costs of
businesses.
Finally, a Dutch enforcement authority pointed out that there is the issue that customers
don’t want to get into arguments with sellers on relatively inexpensive products, which
meant that some customers lose out by not taking their complaint further.
According to a Swedish industry association, it is not possible to identify the business
costs of having a legal guarantee of three years since most of the disputes are solved
before the third year; further adding that it is unusual for a dispute to arise two years
after purchase. In line with the claim by the Swedish business association, a Swedish
government authority indicated that as far as they are aware, a longer legal guarantee
period had not generated any major costs for businesses. In this respect, the findings
from the business interviews (see Annex 3) show that among the 25 Swedish retailers
that participated, 36% considered there to be major or moderate costs, and 44%
thought there to be no costs or prevailing benefits.
In terms of costs for businesses stemming from compliance with a legal guarantee going
beyond two years, a UK government authority considered that the longer guarantee
period might have resulted in marginally higher compliance costs for businesses,
reasoned from the perspective of a counterfactual (if the UK had had a two-year legal
guarantee period).
26
When considering the results from the business interviews on the knowledge about the
legal guarantee period, we found that this knowledge was low in all four Member States
surveyed that currently have a longer legal guarantee period. Knowledge was highest –
though still only over a quarter – in Sweden (28%), followed by Finland (22%), the
Netherlands (12%) and the United Kingdom (9%)33.
The study also found that 48% of businesses interviewed in the context of this study
based in Finland, the Netherlands, Sweden and the United Kingdom or selling in countries
going beyond the minimum EU rules stated that a longer guarantee period entails no
extra compliance costs for them or that benefits prevail. About 37% however, reported
that longer guarantee period creates moderate to major costs for them. While there are
no notable differences in responses according to sales channel or retailers selling
domestically or cross-border, it is noteworthy that medium sized retailers tend to view
the longer guarantee period more as a cost than as a benefit as compared to micro and
small businesses. In view of the small sample sizes, however, any inferences on the basis
of the size of businesses should be approached with caution. The numbers should also be
considered with caution because not all businesses are impacted by the length of the
legal guarantee period in the same way; for example, companies selling large and small
household appliances which are particularly subject to wear and tear only represent 5%
and 6% respectively of that small sample size.
Figure 4. The costs of complying with a legal guarantee period longer than 2 years for
all businesses in Member States with a longer legal guarantee period or selling
in those countries, by share of respondents
Note: concerns Finland, Ireland, Sweden, Netherlands and the United Kingdom.
Source: Ipsos business interviews, n=107
Businesses were also asked to indicate the order of magnitude of the costs of complying
with a longer legal guarantee period. 16 businesses provided an indication of the annual
cost of legal guarantees as a percentage of their turnover. The figures ranged from 0%
to 10%, with the average being 2.67% of turnover of that company. Of the 16
businesses that provided data on the annual cost of legal guarantees, 6 businesses
engage in cross-border sales and the remaining 10 only sell domestically. For the former
group, the cost of guarantees reportedly ranges from 0 to 2% of their turnover, with the
average being 1%. For businesses selling domestically only, the annual cost of
guarantees ranges from 0 to 10% of their turnover, with the average being 3.67%. The
group of 16 respondents comprised:
5 micro businesses (average cost of guarantees = 3.15% of turnover);
8 small businesses (average cost of guarantees = 1.8% of turnover); and
33 The low response rate for the UK (11 respondents) as part of the business interviews for this study (see also Annex 3) should be taken in due consideration when considering these figures.
27
3 medium sized businesses (average cost of guarantees = 2.67% of turnover).
Given the very small sample sizes, we contacted all major European business
associations to validate these figures. Those who responded to our request, indicated
that it was “next to impossible” to quantify compliance costs as an average across all
types of products as the cost of providing a legal guarantee is a function of the product
type. Moreover, retailers have different arrangements as regards the extent to which the
costs of legal guarantees are passed on to manufacturers and/or customers. Indeed
businesses were asked to indicate who bears the cost of the legal guarantee if it is longer
than the manufacturers’ guarantee. The majority of the respondents (45%) stated that
the cost is ultimately borne by their own company. According to a third of respondents
(33%) the cost is partially passed back to the manufacturer/ supplier. Only a small
percentage of respondents (13%) stated that the cost of the legal guarantee is fully
passed on to the manufacturer/ supplier.
2.2.2 Reversal of burden of proof going beyond 6 months
Member States concerned: France, Poland, Portugal
2.2.2.1 Benefits
A longer time period for reversal of burden of proof (i.e. going beyond 6 months)
currently exists in three Member States (France, Poland and Portugal). In Poland the
one-year period for the reversal of the burden of proof was introduced in December
2014. In France the extended period for reversal burden of proof of 2 years was
introduced in 2016. In Portugal the 2 year period for the reversal of burden of proof has
been in place since 2006.
Interviews with stakeholders in France and Poland show that there is so far, relatively
limited information available on the impacts of the burden of proof going beyond six
months. Two consumer representatives from France suggested that it gave consumers
higher chances of obtaining an effective remedy. This point was also raised by a French
government authority. Another point raised by a French government authority was that
alignment of the reversal of the burden of proof with the length of legal guarantee
facilitated effective enforcement. They argued that previously consumers, even though
benefiting from a two year legal guarantee, could have had difficulties in obtaining
redress if the defect was discovered after six months of purchase (i.e. beyond the period
during which the burden of proof is reversed). A French consumer representative argued
that it had been observed that the majority of defects are detected between the first six
months and 24 months of purchase and this longer period will, with effect from March
2016, allow customers to more easily prove that the product was already faulty at the
time of purchase.
In addition to the above, the French government authority and a French consumer
association considered that the benefit of extension may have been an increase in the
quality/durability of products as well as environmental benefits related to lower waste
generation thanks to more sustainable products. There is however, no data available to
support this statement (considering the law was only recently changed in France).
A Polish government authority also perceives the extension as an effective measure of
consumer protection, lowering the number and also the costs of potential disputes for
consumers (i.e. because there is no need for external expert/ legal advisor to assist
consumers if traders refuse to recognise that the fault already existed at the time of
delivery), though no evidence was presented to back up this point. Two Polish
government authorities and a Polish consumer association pointed to an extension in the
reversal of burden of proof period as an effective measure in tackling unfair practices,
notably the practice of selling seasonal products several months in advance of the
relevant season when the consumer may effectively discover the defect (i.e. selling faulty
summer products during Christmas sales). One of these authorities pointed out that the
28
benefits of this rule are not yet maximised as, according to their estimate, only 10% of
the consumers are actually aware of the current duration of the reversal of the burden of
proof.
The statistical analysis carried out using data from the parallel consumer market study
(lot 3)34 indicates two patterns:
In Member States with a longer time period for the reversal of burden of proof,
consumers are less likely to report problems related to defective goods (i.e.
measured as share of respondents reportedly experiencing problems related to
defective goods); and
In Member State with a longer time period for reversal of burden of proof, a higher
number of consumers reportedly receives redress (i.e. measured as share of
relevant respondents receiving redress).
No evidence was however, found of a statistically significant relationship between the
time period for the reversal of burden of proof and the other indicators of consumer
detriment.
No explicit benefits for businesses were highlighted by business associations from Poland
and France in relation to extension of the burden of proof beyond 6 months. A European
business association pointed out that the extension of the reversal of the burden of proof
could have limited the number of disputes. It should be reiterated, however, that
changes to the laws in France and Poland were made only recently and impacts are not
yet (fully) visible.
2.2.2.2 Costs
Member States concerned: France, Poland, Portugal
Consumer associations did not indicate any disadvantages or costs of a longer time
period for reversal of burden of proof for consumers. However, a business association
from France pointed out that the extension of the reversal of burden of proof could result
in higher prices for consumers. Nonetheless, consumer associations did not express any
such concerns. A study conducted by UCF Que Choisir35 examined the impact of the
extension of the reversal of burden of proof period from 6 to 24 months. It focused on
three specific types of products: refrigerators, washing machines and espresso machines,
and the authors monitored and analysed 3,248 specific price references for the chosen
products. The timeframe within which the prices were monitored was the period between
September 4th 2015 and April 15th 2016, with particular attention drawn to the period
shortly before and after March 16th 2016 when the extension came into force. The study
concluded that the extension of the reversal of burden of proof period did not lead to
increases in consumer prices. In fact prices indices fell over the month following the
extension. Yet, inferences from this study should be made with caution as it was
recognised that other factors could have influenced the evolution of prices indices.
Costs for businesses of a longer time period for reversal of burden of proof were
indicated by numerous stakeholders. A Polish regulatory authority considered that the
extended period for reversal burden of proof of 1 year may increase / may have
increased the costs of operations for traders of electronics equipment. It did not
however, have any data to support this conjecture.
One EU-wide business association highlighted that it is too early to fully assess the
effects of extending the time limit for reversal of burden of proof in the Member States
concerned. They explained that impacts on businesses could be different across Member
34 Consumer market study to support the fitness check of the Consumer Law, European Commission, DG Justice and Consumers, forthcoming.
35 Que Choisir, May 2016. Extension á 2 ans de la garantie légale: une information du consommateur loin d’être garantie! Available at : https://www.quechoisir.org/dossier-de-presse-extension-a-2-ans-de-la-garantie-legale-une-information-du-consommateur-loin-d-etre-garantie-n12641/?dl=15939
29
States due to differences in consumer behaviour and varying practices in collective
redress. Nonetheless, a French business association reported on behalf of several of its
members that the number of disputes with consumers have increased by 20-30% as a
result of an extension in the time limit for reversal of burden of proof. This association
also reported that after-sales services to customers have increased by 0.5%. Finally, it
pointed out that one of the biggest issues of the longer time limit for reversal of burden
of proof concerned the costs borne by suppliers as they were not able to pass these on to
manufacturers.
48% of the interviewed retailers based or selling in the Member States going beyond the
minimum EU rules (France, Poland and Portugal) stated that a longer period for reversal
of burden of proof did not result in any extra compliance costs for them or that the
benefits prevail.
About 38% however, reported that a reversal of the burden of proof beyond six months
creates moderate or major costs for them.36 is the results of the business interviews are
shown in Figure 5.
Figure 5. The costs for businesses of complying with a burden of proof of up to two
years for all business in Member States with a longer legal guarantee period or
selling in those countries, by share of respondents
Note: concerns France, Poland and Portugal.
Source: Ipsos business interviews, n=115
Businesses based or selling in these three countries were also asked to indicate the order
of magnitude of the costs of complying with a longer time period for reversal of burden of
proof (>6 months). 20 businesses provided an indication of the annual cost of complying
with this as a percentage of their turnover. The figures ranged from 0% to 20%, with the
average being 3%. Excluding the outlier (20%), the average falls to 2% of the turnover.
Of the 19 businesses (excluding the outlier response) that provided data on the annual
cost of a longer time period for the reversal of burden of proof, 10 businesses engage in
cross-border sales and the remaining 9 only sell domestically. For the former group, the
cost of a longer time period for reversal of burden of proof reportedly ranges from 0 to
5% of their turnover, with the average being 1.2%. For businesses selling domestically
36 Due to the low number of responses a disaggregation by sales channel does not produce reliable findings, though there are no big differences in responses according to sales channel. For retailers selling domestically or cross-border there is no notable difference in the responses. However, medium sized retailers tend to view the longer period of reversal of burden of proof more as a cost than as a benefit as compared to micro and small businesses. As above, any inferences on the basis of the size of businesses should be approached with caution.
30
only, the annual cost of guarantees ranges from 0 to 10% of their turnover, with the
average being 3%. The group of 19 respondents comprised:
9 micro businesses (average annual cost of longer time period for reversal of
burden of proof = 2.1% of turnover);
8 small businesses (average annual cost of longer time period for reversal of
burden of proof = 2.38% of turnover); and
2 medium sized businesses (average annual cost of longer time period for reversal
of burden of proof = 0.55% of turnover).
Again, caution is urged in interpreting the above data. Given the small sample
sizes, these findings cannot be generalised. These figures provide an indicative
order of magnitude of the costs of compliance with this national rule going beyond
the EU minimum rules.
2.2.3 No obligation on consumers to notify the seller of a defect within a
specified time frame (usually two months) of discovering it
Member States concerned: Austria, France, Ireland, Greece, Germany,
Poland and the United Kingdom
2.2.3.1 Benefits
Seven Member States currently do not place an obligation on consumers to notify the
seller of a defect within a specific time frame.
The impact of not having this obligation for consumers is evaluated positively by several
stakeholders, predominantly consumer representatives and some government or
regulatory authorities. In Poland, a government authority and consumer association
report that the removal of the notification obligation in December 2014 has resulted in a
lower number of disputes, which benefits consumers. This is due to the elimination of
cases where traders and consumers disagreed on whether the defect was or was not
notified within two months from discovering it. The Polish consumer association
highlighted that it considers practical implications for the market to be limited as a result
of the removal of the notification obligation, mainly due to awareness about the law
being minimal, both among consumers as well as businesses.
In the same vein, a French government authority stated that the main consumer benefit
of not having a two-month notification period was the avoidance of disputes about the
exact time when the consumer discovered the defect.
A UK government authority argued that a strict two-month period would cause additional
problems relating to enforcement and enable some opportunities for rogue traders. It
suggested that putting no obligation on consumers to notify defects within a specified
time period instilled consumer confidence. A regulatory authority indicated that no
notification obligation in the UK meant that there is no ‘cliff edge’ whereby if consumers
notify sellers of a defect a day too late, they lose their rights completely. A UK consumer
representative added that more flexibility as to when the consumer has to notify the
seller of the defect increases overall consumer protection. A German consumer
association reasoned along the same lines, indicating that consumer protection was
important as it would be difficult to prove for consumers when exactly they discovered
the effect.
The same German consumer association reasoned that having an obligation would be
disadvantageous for consumers in cases where they do not use the product immediately
after purchase, and as such not having the obligation has (had) the advantage of
ensuring leniency also in cases where the consumer purchases a seasonal product that
he or she would only start to use many months later.
31
Statistical analysis of the consumer survey data from the Consumer Market Study to
Support the Fitness Check of Consumer Law (lot 3)37, shows that:
In Member States where consumers have an obligation to notify the defect, a
higher number of consumers receives redress (i.e. measured as share of relevant
respondents receiving redress);
In Member States where consumers have an obligation to notify the defect,
consumers suffered a lower level of net financial detriment (and other costs
associated with the problem of defective goods such as administrative follow-up,
legal follow-up and product follow-up costs).
These findings suggest that net financial detriment and other costs of the problem are
lower in countries that place an obligation on consumers to notify defect within a
specified timeframe. This contrasts with the views of consumer representatives in the
United Kingdom, Germany, France and Poland – countries with no such obligation – that
not having such an obligation places a lower burden on consumers. While the perception
is that consumers are better protected by not having such an obligation, the statistical
analysis based on available survey data provides contradictory results i.e. in countries
where consumers have an obligation to notify the defect the share of consumers
receiving redress is higher. However, as previously explained, causal inferences cannot
be drawn from the statistical analysis. It is plausible that there are other factors at play
in countries that have a notification obligation (such as better complaints handling and
redress mechanisms) that result in a higher share of consumers obtaining redress and
lower net financial detriment
Business associations did not report any explicit benefits of not placing notification
obligations on consumers. Nonetheless, government authorities in France, Poland and the
United Kingdom (where no notification obligation exists), pointed to fewer problems
related to enforcement and a lower number of disputes between consumers and traders
which might have led to a reduction in some of businesses’ costs related to complaints
handling and resolution. However, no data is available to allow us to test whether this is
indeed the case for those Member States that currently do not have such an obligation.
2.2.3.2 Costs
Member States concerned: Austria, France, Ireland, Greece, Germany,
Poland and the United Kingdom
The absence of the obligation for consumers to notify the seller of a defect within 2
months of discovering it has, according to stakeholders interviewed in Germany, the
United Kingdom, Poland and France, not created any issues for consumers.
On the other hand, costs to businesses were reported by numerous stakeholders,
although data on impacts are not available. A German business association stated that
having no notification obligation can lead to situations where consumers could keep using
a product and ask for remedies for a defect which was partly caused or worsened by
using it. A similar point was raised in the European Commission’s open public
consultation from May to September 201638 where two German business associations
suggested that (in theory) a consumer who has known about a defect for a while could
have the possibility to continue to using the defective good (at the risk of it becoming
further damaged) and still put in a claim against the trader, however without providing
any factual evidence for such practices.
European business associations contacted were concerned that the absence of
notification obligation might have encouraged procrastination among consumers and
37 Consumer market study to support the fitness check of the Consumer Law, European Commission, DG Justice and Consumers, forthcoming. 38 Open public consultation for the Fitness Check of EU consumer and marketing law: http://ec.europa.eu/justice/newsroom/consumer-marketing/opinion/160502_en.htm. Results not yet published at the time of writing this report.
32
created losses/ costs for sellers that could have been avoided in the Member States
concerned (Austria, France, Ireland, Greece, Germany, Poland and the United Kingdom).
For example, a consumer might notify the seller of a defect many months after
discovering the defect, by which time the product might have become obsolete or
outdated. If the defect had been notified immediately, it might have been possible to
repair the product and sell it as a second hand product.
The 2015 Study on legal and commercial guarantees39however, showed that consumers
are in general rather active and react in due time. Depending on the type of product,
between 37% and 58% of problems were followed up immediately by consumers when
the problem occurred and between 25% and 32% of problems were followed up within
one week of occurrence40. Moreover, in its response to the Open Public Consultation41,
one of the biggest online retailers in the EU stated that 90% of their customers return
damaged goods within the first month of a purchase.
In Latvia, an obligation for consumers to notify the seller of any defect within two months
was introduced in 2014, but did not exist beforehand. According to a Latvian consumer
authority the main rationale of this amendment was to incentivise consumers to signal
the problem more promptly. A Latvian government authority stated that this amendment
was also motivated by a willingness to reduce uncertainty for businesses. It stressed that
the lack of the notification obligation (that existed in the country until 2014), discouraged
some consumers from promptly reporting the issue with the product. However, none of
the stakeholders interviewed representing consumers and businesses, nor the relevant
authorities consulted, were able to provide any data on the potential effects of the
legislative change.
The business interviews show that 37% of respondents indicated that no notification
obligation entailed costs, as shown in Figure 6. At the same time, a majority of
businesses (51%) considered there to be no costs involved. Interestingly, among
Member States where such obligation currently does not exist (for example, Austria and
France), a majority of the respondents thought that this does not have any costs,
whereas business opinion in Germany and the United Kingdom was evenly split. Only in
Greece and Poland did a majority of respondents stated that not having a notification
obligation entailed major costs for businesses.42 This analysis by Member States has to
be looked at with caution due to the low number of businesses interviewed in each
Member States.
39 Ipsos (2015) Consumer market study on the functioning of Legal and Commercial Guarantees for consumers in the EU. 40 Ibidem. 41 Open public consultation for the Fitness Check of EU consumer and marketing law: http://ec.europa.eu/justice/newsroom/consumer-marketing/opinion/160502_en.htm. Results not yet published at the time of writing this report. 42 When considering business size it should be noted that medium-sized enterprises more often indicate there to be costs than small enterprises, which in turn are more likely to note costs than micro-sized enterprises. Any inferences on the basis of the size of businesses should be approached with caution.
33
Figure 6. The costs for businesses of there being no obligation on consumers to notify
sellers of a defect within two months of discovering it for all businesses in
Member States without a notification obligation or selling in those countries
without such an obligation, by share of respondents
Note: concerns Austria, France, Ireland, Greece, Germany, Poland and the United
Kingdom.
Source: Ipsos business interviews, n=186
Businesses were also asked to indicate the order of magnitude of the costs of there not
being a legal obligation on customers to notify the seller of a defect within 2 months of
discovering it). 32 businesses provided an indication of the annual cost of this as a
percentage of their turnover. The figures ranged from 0% to 10%, with the average
being 2.8%.
Of the 32 businesses that provided data on costs, 15 businesses engage in cross-border
sales and the remaining 17 sell only domestically. For the former group, the cost of no
obligation reportedly ranges from 0 to 10% of their turnover, with the average being
2.53%. For businesses selling domestically only, the annual cost also ranges from 0 to
10% of their turnover, with the average being 3.1%. The group of 32 respondents
comprised:
13 micro businesses (average annual cost of no obligation = 1.6% of turnover);
15 small businesses (average annual cost of no obligation = 2.63% of turnover);
and
4 medium sized businesses (average annual cost of no obligation = 7.5% of
turnover).
As above, caution is urged in interpreting the above data. Given the small sample sizes,
these findings cannot be generalised. These figures provide an indicative order of
magnitude of the costs of compliance with this national rule going beyond the EU
minimum rules.
34
2.2.4 Free choice of remedies and the right to reject
Member States concerned: Croatia, Greece, Lithuania, Slovenia, Portugal
(free choice), as well as Ireland and the United Kingdom (right to
reject)
2.2.4.1 Benefits
A free of choice of remedies exists in five Member States, while in two Member States
consumers have the right to reject a product within 30 days from the purchase in
addition to a hierarchy of remedies.
Benefits to consumers were widely noted by stakeholders representing consumers as well
as government authorities. According to two UK authorities, the key benefit of the short-
term right to reject from the consumers’ perspective is increased competition and a
positive effect on the quality of the products. As regards the right to reject, evidence
from the open public consultation showed that a UK government authority defended the
short term right to reject by citing research carried out by the UK’s independent Law
Commission in 2009 which found that short-term access to a refund when exercising a
right to reject goods inspires consumer confidence (89% of consumers said it should be
retained alongside other remedies) when buying unfamiliar brands or at smaller shops,
boosts competition and drives up product standards43. It has also been argued by the
Law Commission that the right to reject has helped in reducing disputes between traders
and consumers and is the most used remedy44.
A UK consumer representative pointed out that the short-term right to reject has been
particularly effective for certain types of goods such as prams where lengthy reparation
as opposed to an immediate refund could cause consumer inconvenience. In addition, a
UK regulatory authority argued that free choice prevents time wastage with potentially
costly and ineffective repairs, especially if these are cross-border and involve substantial
delivery costs and complications. A Polish government authority also made the same
point i.e. free choice is considered appropriate in the context of on-line cross-border
trade where costs of shipping and time required to complete reparation may be longer,
and thus be more cumbersome and time-consuming.
The statistical analysis carried out using survey data from the forthcoming study
supporting the fitness check law 45 shows that:
There is a statistically significant positive relationship between free choice of
remedies and the incidence of problem relating to defective goods i.e. in Member
States with a free choice of remedies, consumers are more likely to experience
problems relating to defective goods. As previously pointed out, the analysis does
not indicate causality i.e. a free choice of remedies leads to a higher incidence of
defective products. There could be other explanations. For example, it is possible
that consumers in Member States with free choice of remedies or the short-term
right to reject (Croatia, Greece, Lithuania, Slovenia, Portugal, Ireland, UK) are
spending more on certain types of consumer goods that are more prone to defects
or the general quality of products available in these countries is falling short of
consumers’ expectations or that consumers in these countries are more aware of
their rights and empowered to defect and report on defects.
There is however, a statistically significant negative relationship between free
choice of remedies and net financial detriment i.e. in Member States with free
choice of remedies, consumers are likely to experience lower levels of net financial
43 The Law Commission and The Scottish Law Commission (2009) Consumer Remedies for Faulty Goods.
44 The Law Commission Consultation Paper No 188 and The Scottish Law Commission Discussion Paper No 139 CONSUMER REMEDIES FOR FAULTY GOODS A Joint Consultation Paper, http://www.scotlawcom.gov.uk/files/7412/7877/5849/dp139.pdf
45 European Commission, DG Justice and Consumers, forthcoming, Consumer market study to support the fitness check of consumer law.
35
detriment. Free choice enables consumers to get refund immediately and this
would quite naturally reduce net financial detriment.
The analysis did not reveal any statistically significant relationship between this variable
and the other indicators of consumer detriment.
No other explicit benefits for businesses related to free choice of remedies were indicated
by interviewed stakeholders for the five Member States that currently have such a free
choice of remedies.
2.2.4.2 Costs
Member States concerned: Croatia, Greece, Lithuania, Slovenia, Portugal
(free choice), as well as Ireland and the United Kingdom (right to
reject)
A Croatian consumer association pointed out that a free choice of remedies could result
in more disputes between consumers and businesses, thus reducing trust between
consumers and sellers though further evidence was not provided. A Greek consumer
representative highlighted that the current system of free choice of remedies could lead
to confusion in cases of exception from the free choice (for instance, related to
considerations of good faith).
Stakeholders in Croatia, Greece and the United Kingdom could not provide any evidence
on the costs of this system for businesses. It should be noted, however, that seven
business associations contacted from the countries currently having a free choice of
remedies chose not to participate in the study.
Interviewed businesses or business associations from countries with a hierarchy of
remedies (Denmark, France, Germany, Latvia, Italy, Romania, Netherlands, Spain,
Sweden) indicated that in some cases, a free choice of remedy can lead to excessive
costs for traders by depriving them of the opportunity to address the problem with
optimal costs and equally high consumer satisfaction i.e. when refund as opposed to
reparation is chosen despite the trader’s ability and willingness to address the problem
immediately and in full scope.
A European business association highlighted that leaving the choice to consumers in
those countries places a burden on sellers as they can no longer opt for the most
economically effective remedy. It argued that in the long run a free choice of remedies
could encourage a “throw away” culture. It would encourage consumers to return or
throw away products showing defects instead of trying to have them repaired.
The survey of retailers found that among the 121 retailers that are based in or sell to
Member States with a free choice of remedies or the short-term right to reject), a
majority (54%) considered there to be major or moderate costs because of this rule. A
minority (35%) noted no costs or prevailing benefits. Among many businesses there was
a strongly held view that costs prevailed, especially among medium-sized businesses
(80%), though less so among small and micro-size enterprises (around 50%). Any
inferences on the basis of the size of businesses should however, be approached with
caution.
36
Figure 7. The costs for businesses for a free choice of remedies for all business in
Member States with a free choice of remedies or selling in those countries, by
share of respondents.
Note: Croatia, Greece, Lithuania, Slovenia, Portugal (free choice), as well as Ireland and
the United Kingdom (right to reject).
Source: Ipsos business interviews, n=121
Businesses were also asked to indicate the order of magnitude of the costs of free choice
of remedies. 30 businesses provided an indication of the annual cost of this as a
percentage of their turnover. The figures ranged from 0% to 10%, with the average
being 1.9%.
Of the 30 businesses that provided data on costs, 9 businesses engage in cross-border
sales and the remaining 21 only sell domestically. For the former group, the cost of not
obliging consumers to notify defects within a specific timeframe reportedly ranges from 0
to 10% of their turnover, with the average being 3.2%. For businesses selling
domestically only, the annual cost ranges from 0 to 5% of their turnover, with the
average being 1.3%. The group of 30 respondents comprised:
15 micro businesses (average annual cost of no obligation = 2.3% of turnover);
13 small businesses (average annual cost of no obligation = 1.2% of turnover);
and
2 medium sized businesses (average annual cost of no obligation = 3% of
turnover) .
Again, caution is urged in interpreting the above data. Given the small sample
sizes, these findings cannot be generalised. These figures provide an indicative
order of magnitude of the costs of compliance with this national rule going
beyond the EU minimum rules.
2.2.5 Summary of findings on the impacts of national rules going beyond the
Directive
Table 2.3 presents the summary of findings as regards the impacts of national rules
going beyond the Directive for the four key provisions in the Directive discussed in this
section. It was not possible to quantify the costs and benefits of rules going beyond
minimum as businesses do not collect data on cost of compliance with individual
provisions or pieces of consumer legislation. What is presented below is a qualitative
assessment of costs and benefits as collected via stakeholder interviews and the business
interviews (see Annex 3).
37
Table 2.3 Summary of findings
Provision
of the
Directive
Member
States
going
beyond
the
Directive
Costs Benefits
Legal
guarantee
going
beyond
two years
Finland,
Ireland, the
Netherlands
, Sweden
and the
United
Kingdom
Mixed evidence on compliance costs for businesses
According to stakeholders across all categories from countries currently going
beyond two years, costs depend on specific type of system chosen, with legal guarantees tied to product durability considered complex and cumbersome by
stakeholders in the Netherlands. In Finland, views are mixed.
None of the stakeholders in
Sweden could point to any disadvantages or costs.
In the UK46, consumer
representatives did not cite any costs, government authorities argued that compliance costs might have increased for businesses.
Consumer representatives highlighted several benefits, although they could
not provide any facts or supporting evidence:
manufacturers incentivised to produce
better quality and more durable products
less waste and lower replacement costs for consumers and traders
enhanced consumer protection and confidence, especially for more
expensive and durable products
Government authorities also
pointed to higher consumer
confidence, and better, more
durable products;
Businesses have mixed opinions
on the benefits and costs of a
longer legal guarantee period;
Reversal
of burden
of proof
going
beyond 6
months
France,
Poland and
Portugal
Mixed evidence on compliance
costs for businesses
Inconclusive evidence on
effects on prices, though
some businesses report
negative price effect
Quantitative findings show that more
consumers enjoy redress
Consumer representatives and government authorities in France and
Poland perceive or expect (though only anecdotal evidence available):
a lower number of complaints and
disputes related to defective goods;
improved quality and durability of products.
No
obligation
on
consumers
to notify
the seller
of a defect
within a
specified
timeframe
(usually
two
Austria,
France,
Ireland,
Greece,
Germany,
Poland and
the United
Kingdom
According to businesses, there is risk of abuse by consumers resulting in extra
costs for sellers
Mixed evidence on
compliance costs for
businesses
Consumer representatives and
some government authorities
reported low number of disputes,
while statistical analysis suggests
that in countries with a
notification obligation, it is easier
for consumers to obtain redress,
though this might be due to other
factors (characteristics of the
consumer redress and protection
systems of the Member States
itself).
46 No business or retail association was prepared to participate in the study
38
Provision
of the
Directive
Member
States
going
beyond
the
Directive
Costs Benefits
months)
of
discoverin
g it.
Free
choice of
remedies
and the
right to
reject
Croatia,
Greece,
Lithuania,
Slovenia,
Portugal
(free
choice), as
well as
Ireland and
the United
Kingdom
(right to
reject).
According to businesses, it can be costly to provide a remedy if it is cheaper and equally effective to select another remedy;
Mixed evidence on
compliance costs for
businesses.
Consumer representatives and
some government authorities
point to:
increased competition between
traders;
reduced time wastage due to
ineffective remedies chose
improved consumer confidence.
Nonetheless, there is limited hard
evidence on the benefits to
consumers of free choice of
remedies.
2.3 Impact on the single market and cross-border activity
Evidence from stakeholder consultations
Interviews with consumer protection authorities, consumer associations/ECCs, business
associations and ADR bodies show that differences in national consumer contract laws is
perceived as one of several obstacles for cross-border activity. Overall, this is seen more
as a problem dissuading businesses from entering into new markets than for consumers
buying in shops located in another EU Member State.
According to business associations in Denmark, Spain and the Netherlands,
fragmentation in national consumer protection legislation is a less important barrier for a
retailer thinking of opening a shop in another EU Member State compared to other
issues such as complexity of fiscal regimes (i.e. identification of applicable VAT rate) or
employment laws. However, a Swedish business association sees fragmentation of
consumer law as a rather substantial barrier although it is considered as a more
significant barrier for online retailers. Some consumer organisations suggested that
national fragmentation in consumer protection rules can be more of an issue when there
is already a dispute between consumer and trader rather than at the time when the
decision to engage in a cross-border transaction is being made.
Evidence from relevant Eurobarometers
The microdata stemming from Eurobarometer survey Fl35947 were analysed to
understand the main obstacles preventing retailers from selling in other EU countries.
Responses were extracted for retailers falling within NACE category G47 (Retail trade,
except of motor vehicles and motorcycles).48
47 Eurobarometer survey Fl359 was published in June 2013. 48 The Eurobarometer survey targets companies which sell both goods and services. As such, it covers a broader set of companies falling within NACE categories G, H, I, J, K, excluding G 51 Wholesale trade and commission trade, except of motor vehicles and motorcycles; J 67 Activities auxiliary to financial
39
According to this survey, 42% of retailers using face-to-face sales channels consider that
the additional costs of compliance with different consumer protection rules and contract
law (including legal advice) is a “very important” or “fairly important” barrier to the
development of their cross-border sales to other EU countries. This is slightly lower than
the 46% reported by those using distance sales channels. Between the two sales
channels there are some different results across Member States, though significant
differences (i.e. a majority reporting additional costs for one channel as opposed to a
minority for the other channel) are rare. An overview of responses by Member States for
both channels is shown in Figure 8.
intermediation; K73 Research and development; K74 Other business activities. http://ec.europa.eu/environment/emas/pdf/general/nacecodes_en.pdf
40
Figure 8. Percentage of retailers using face-to-face and distance sales channels
reporting additional costs of compliance with different consumer protection
rules and contract law (including legal advice) as a “very important” or “fairly
important” barrier to the development of their cross-border sales to other EU
countries
Source: ICF analysis of Fl359 data
2.3.1 Cost of legal advice and adapting the conditions of sale to different
national rules
This section provides an overview of findings on the legal and adaptation costs incurred
by businesses when expanding their operations to other Member States. The cost of legal
advice would naturally depend on the complexity of the legislation in question.
Differences in national consumer contract laws result in one-off costs for retailers who
want to sell in other Member States to identify the foreign law and adapt the company's
terms and conditions or even the business model accordingly. Legal costs may also
include ongoing costs for periodical adaptations to changes in national laws or costs
specific to litigation, where expert opinion on foreign consumer laws is needed.
To estimate the one-off costs that a company would face due to consumer contract law
differences when, for instance, opening a shop in another Member State, we drew on the
cost estimations cited in the Commission’s proposal for a Directive on online and other
41
distance sales of goods. It was considered that similar costs apply also in the face-to-face
context i.e. where a company opens a physical shop in another EU country and needs to
apply to the local consumer legislation of that country.
Table 2.4 Contract law-related cost assumptions provided in the Commission’s
proposal for a Directive on online and distance sales of goods
Cost type Estimation
One-off costs stemming from
differences in consumer
contract law (i.e. costs for
identifying the foreign rules,
possibly translating them,
analysing them and
consequently possibly
adapting general terms and
conditions and even the
business model accordingly).
-According to business interviews carried out in
2015, costs range from €4,000 to €12,000 per
Member State49.
-A major EU retailers' association responding to the
2015 public consultation on digital contracts
reported contract law-related costs of €9,000-
€10,000 for its members to enter the market of one
Member State.
- Based on data from a SME Panel Survey (2011),
the one-off contract law related costs per Member
State amount to an average of €9,000 per Member
State. See explanation below.
One-off costs related to
adaptation to new national
rules.
- Based on data from the IFF Research study
"Consumer Rights and Business Practices (March
2013), prepared for UK Department for Business
Innovation and Skills50, the average costs to adapt
terms and conditions to new national legislation
would amount to about £5,133 (approx. 6,800
euros as calculated in October 2015).
Contract-law related costs per company for entering the market of one Member States
have been calculated based on the responses gathered in the context of a SME Panel
Survey in 2011. Traders involved in B2C trade were asked to estimate the savings on
costs for entering one Member State's market that would result from the application of
uniform contract law rules across the EU. 62 traders indicated that these costs were
lower than €5,000; 51 indicated these costs as being in the range of €5,000 - €10,000;
23 in the range of €10,000-€15,000; 11 in the range of €15,000-€30,000 and 11
estimated the costs to be higher than €30,000.
Based on these responses, the Impact Assessment for online and other distance sales of
goods calculated the average costs associated with B2C transactions, using lower and
high bound estimates.
According to the low estimate, the average contract law related costs for firms
involved in B2C transactions amount to €8,877. The costs are estimated as the
weighted average value of reported cost ranges (i.e. €2,500, €7,500, €12,500,
€22,500)51.
According to the high estimate, the average contract law related costs for firms
involved in B2C transactions amount to €10,269. The costs are again estimated at
the weighted average value (i.e. €2,500, €7,500, €12,500, €22,500) of reported
cost ranges. Yet, for the calculation of this high estimate, it is assumed that the
49 Impact assessment, Proposals for Directives of the European Parliament and the Council (i) on certain aspects concerning contracts for the supply of digital content, (ii) on certain aspects concerning contracts for the online and other distance sales of goods, Annex 2 50 This consists of £3,819 for updating terms and conditions and £1,314 for developing new versions of documentations when terms and conditions are changed (including in-store posters, counter-top signage, consumer contracts, receipts etc.). See pages 26-27 of the full report 51 (2 500 * 62 + 7 500 * 51+12 500 * 23 + 22 500 * 11 + 30 000 * 11) / 158 = 8,876.582.
42
costs reported at the last range (more than 30,000) are €50,000. This leads to
average costs per firm of €10,26852.
Additionally, several legal experts were contacted in each Member State to obtain data
on the cost of obtaining legal advice and adapting the terms and conditions of sale to a
particular national law within the framework of the present Study. A respondent from a
Greek law firm stated that the cost of obtaining legal advice on Greek rules related to
legal guarantees for a trader from another Member State would vary between €2,000
and €2,500 (excluding VAT); and the costs for drafting the conditions of sales by a Greek
lawyer would range between €2,500 and €3,000 (excluding VAT).
An Austrian legal firm advised these costs to be as follows: cost of obtaining legal opinion
on the national regime related to legal guarantees in Austria: € 5,000 (plus VAT) and
drafting of conditions of sales (which is the document embedding the legal guarantee): €
10,000 (plus VAT). The overall evidence on legal costs is limited and patchy and provides
a wide spread. Taking available information into account (presented above), we assume
the costs of obtaining advice on the national rules of another EU Member State and
adapting terms and conditions would range from €4,000 to €18,000 (VAT inclusive) per
Member State.
52 (2 500 * 62 + 7 500 * 51 + 12 500 * 23 + 22 500 * 11+ 50 000 * 11) /158=10,268.99.
43
3 Impacts of potential policy options
This section discusses the potential impacts of (a) no further EU policy action on rules
applicable to face-to-face sales which could potentially result in a situation where there
are different sets of rules for face-to-face sales and distance sales (on the assumption
that the Commission's proposal on the distance sale of goods were to be adopted without
the extension of its scope to face-to-face sales); and (b) alignment of rules applicable to
distance and face-to-face sales of goods based on the proposal for online sales of goods
and harmonisation of selected consumer protection rules.
3.1 No EU policy action: differentiation between rules for face-to-
face and distance sales of goods
No EU policy action would imply that the CSG Directive would continue to apply to face-
to-face sales of goods. If the proposed Directive on online and distance sales of goods53
were to be adopted with the proposed scope and the proposed provisions, consumers'
rights would vary depending on whether they purchase via distance or face-to-face
channels. Given the increasing importance of the omni-channel distribution model (i.e.
selling via multiple channels such as directly in a shop, online or otherwise at a distance),
this would inevitably put a growing number of retailers in a situation where for selling the
same products they will have to apply different rules, depending on the sales channel
used.
According to industry data, the number of omni-channel retailers is poised to increase in
the future due to expected growth of online sales54.
In Europe, the share of online retail reached 6.3% of total retail sales in 2013, growing to
7.2% in 2014 and 8.4% in 2015.5556 Although of course, the online growth could to some
extent have a negative effect on physical stores, digital channels will mainly co-exist with
physical ones in omni-channel business models. This trend follows consumer's increasing
demand and expectation to be able to move from digital channels to physical stores and
vice versa before making the final purchase. According to the MIT Technology Review
report "Beyond the checkout Cart”, more than 80% of store shoppers check prices
online. Moreover, the trend of showrooming has shown that people go in-store to review
a product, and then go online to find the product at a cheaper price.57
Table 3.1 provides an overview of the discrepancies that would arise in consumer
protection rules for the two channels in each Member State. We have highlighted in
green, where the consumer protection rules for face-to-face sales would offer better
protection than the possible future rules for distance sales. The red cells indicate the
opposite situation i.e. where consumer protection rules for face-to-face sales would offer
lower levels of protection than the rules for distance sales
53 COM(2015) 635 final - Proposal for a Directive of the European Parliament and of the Council on certain aspects concerning contracts for the online and other distance sales of goods. Available at: http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52015PC0635&from=EN
54 There is particularly strong potential for catching-up process and fast growth of online sales in Central and Eastern Europe. For instance, while in France and Spain circa 50% of retailers sell online, the proportion in Romania and Poland is 19 and 27% respectively. See for instance European Parliament Statistical Spotlight on cross-border online sales in the EU available at: http://www.europarl.europa.eu/RegData/etudes/BRIE/2016/586621/EPRS_BRI(2016)586621_EN.pdf
55 Centre for Retail Research, "Online Retailing in Europe, the U.S. and Canada 2015 – 2016, http://www.retailmenot.com/corp/static/filer_public/86/ed/86ed38d1-9cb9-461c-a683-ab8e7b4e1ffc/online_retailing_in_europe_us_and_canada.pdf
56 EDelivery, 2016. Cross-border sales in Europe to hit EUR 40 billion by 2016. Available at: http://edelivery.net/2016/03/cross-border-sales-europe-hit-e40bn-2018/
57 See: (http://www.tlcmarketing.com/Market/uk/Article/Post/Marketin--trend-report-2015-the-omnichannel-experience, http://www.forbes.com/sites/danielnewman/2014/07/22/the-omni-channel-experience-marketing-meets-ubiquity, http://marketingland.com/why-brands-should-go-omni-channel-in-2014).
44
Table 3.1 Potential discrepancies in consumer protection rules for sales via face-
to-face channels and distance channels
Member State
Rules applicable to face-to-face channels
Duration of legal guarantee
Obligation on
consumers to notify defect to seller within specific timeframe
Time period for reversal of burden of
proof period
Approach to Remedies
Austria 2 years No 6 months Hierarchy
Belgium 2 years Yes 6 months Hierarchy
Bulgaria 2 years Yes 6 months Hierarchy
Croatia 2 years Yes 6 months Free choice
Cyprus 2 years Yes 6 months Hierarchy
Czech Republic 2 years Yes 6 months Hierarchy
Denmark 2 years Yes 6 months Hierarchy
Estonia 2 years Yes 6 months Hierarchy
Finland No fixed time limit Yes 6 months Hierarchy
France 2 years No 2 years Hierarchy
Germany 2 years No 6 months Hierarchy
Greece 2 years No 6 months Free choice
Hungary 2 years Yes 6 months Hierarchy
Ireland 6 years No 6 months Hierarchy+ short term right to reject
Italy 2 years Yes 6 months Hierarchy
Latvia 2 years Yes 6 months Hierarchy
Lithuania 2 years Yes 6 months Free choice
Luxembourg 2 years Yes 6 months Hierarchy
Malta 2 years Yes 6 months Hierarchy
Poland 2 years No 1 year Hierarchy
Portugal 2 years Yes 2 years Free choice
Romania 2 years Yes 6 months Hierarchy
Slovakia 2 years Yes 6 months Hierarchy
Slovenia 2 years Yes 6 months Free choice
Spain 2 years Yes 6 months Hierarchy
Sweden 3 years Yes 6 months Hierarchy
Netherlands No fixed time limit Yes 6 months Hierarchy
United Kingdom 6 years (5 years in Scotland)
No 6 months Hierarchy+ short term right to reject
Face-to-face rules offer better protection
Distance sales rules offer better protection
45
Nearly all stakeholders across all categories58 indicated that having different rules for
face-to-face and distance sales channels would not be desirable. Stakeholders indicated
that no change in the rules for face-to-face sales of goods would be difficult to explain
and they considered it as problematic for both consumers and businesses given the need
to deal with two different sets of rules for the two sales channels. While stakeholders
consulted argued that having two sets of rules for two sales channels should be avoided,
there was (understandably) disagreement over how differentiation is best avoided. Views
expressed on this point were mostly on harmonisation of legislation of the two sales
channels as a principle rather than on individual rules for alignment (i.e. the duration of
the legal guarantee).
The potential costs and benefits of having no change in rules for face-to-face sales are
set out below.
3.1.2 Benefits
None of the stakeholders consulted for this study identified any benefits for consumers
associated with a different set of rules for the different sales channels.
In Member States which would offer higher protection for face-to-face sales (if and when
the proposal for a full harmonisation Directive for distance sales of goods is eventually
accepted), some consumers could potentially shift from online to face-to-face sales, thus
benefitting some retailers who have face-to-face operations. Yet, in case of retailers
trading online and face-to-face, the overall balance between costs and benefits could
vary, depending for instance on the share of sales executed through each of two
channels.
3.1.3 Costs
Across all stakeholder types, different rules for different sales channel are seen as a
source of confusion for consumers. Many were of the opinion that such a situation would
create discrepancies in protection available to consumers shopping via different channels.
In Member States which would end up offering higher protection for distance sales (if and
when the proposal for a full harmonisation Directive for distance sales of goods is
eventually accepted), as shown in Table 3.1, a share of consumers is likely to shift from
face-to-face to online sales.
According to stakeholders from business associations, differences in rules will have cost
implications for businesses that use both sales channels because it would require them to
comply with two different sets of rules when selling the same product. In addition, Dutch
and Spanish business associations pointed out that it could lead to consumers favouring
one sales channel over another. Eight businesses responded specifically on this point as
part of the open public consultation and argued that introducing a new Directive for the
online environment would lead to legal fragmentation and uncertainty.
There is a potential for market distortion if consumers buying offline (from shops) have
better rights, e.g. free choice of remedies/ right to reject, longer guarantee periods etc.
in countries like UK, Ireland. Consumers in these countries may be more inclined to buy
offline, thus reducing growth in online/distance markets. Conversely consumers in
countries such as Belgium and Denmark, might shift from offline to online/ distance sales
channels, thus potentially contributing to the decline of the ‘high street’ in these
countries.
In the same vein, business associations in Spain and the Netherlands pointed to unfair
competitive advantages for business using only one sales channel that leads them to
have lower costs vis-à-vis businesses that use multiple sales channel.
58 ADR bodies, business/ industry associations, consumer protection authorities/ relevant national ministries, consumer associations, European Consumer Centres.
46
Table 3.2 below shows the estimated number of retailers that sell both face-to-face and
at a distance; they would thus be adversely affected if no policy action is taken to align
the rules applicable to face-to-face sales of goods with the Commission's proposal.59
It is estimated that 1.3 million retailers (37% of the EU retailers) are currently using both
face-to-face and distance selling channels who would potentially need to comply with two
different regimes (national rules implementing the Sales and Guarantees Directive and
the future harmonised EU rules for online and other distance sales). Businesses were not
able to provide quantitative estimates of the cost of compliance with two different
regimes, but these can be expected to be significant when considering that:
Omni-channel retailers would have to develop separate terms and conditions for
the two different sales channels (offline versus online);
The remedies offered would vary by channel, which might result in a higher
number of complaints / consumer disputes (due to confusion among consumers)
and thus legal costs;
Cost of training staff in the two different sets of rules;
Cost of adapting business processes (procedures for handling complaints,
remedies etc.) for the different channels.
Table 3.2 Estimated number of retailers that sell both face-to-face and at a
distance
Number of
retailers
(NACE G47)
%
retailers
selling via
F2F
channels
only
% retailers
using both
F2F and
distance
channels
No. of
retailers
selling via F2F
channels only
No. of
retailers using
both F2F and
distance
channels
2013 2015 2014
source: Eurostat Fl396 Fl396 Fl396 Fl396
[1] [2] [3] [4] = [1] X
[2]
[5] = [1] X
[3]
Austria 40,905 56% 36% 22,725 14,609
Belgium 74,202 51% 37% 37,814 27,112
Bulgaria 98,162 48% 32% 46,644 31,328
Croatia 16,629 58% 28% 9,583 4,650
Cyprus 9,303 56% 29% 5,252 2,701
Czech Republic 127,117 43% 41% 54,861 52,185
Denmark 19,634 38% 50% 7,492 9,817
Estonia 5,502 64% 33% 3,537 1,790
Finland 20,915 53% 35% 11,025 7,296
France 488,472 41% 47% 199,667 231,757
Germany 306,485 58% 30% 178,364 92,950
Greece 160,105 45% 49% 72,606 78,191
Hungary 81,187 57% 31% 45,955 25,531
59 These estimates have been derived using the latest statistics from Eurostat for 2012 and 2013 for NACE category G47 (which covers retail trade, except of motor vehicles and motorcycles) and Eurobarometer data (Fl359 published in 2013). Microdata from Fl359 was used to extract the results specifically for businesses falling within NACE Rev 2 G47 using face-to-face as well as distance selling channels.
47
Number of
retailers
(NACE G47)
%
retailers
selling via
F2F
channels
only
% retailers
using both
F2F and
distance
channels
No. of
retailers
selling via F2F
channels only
No. of
retailers using
both F2F and
distance
channels
2013 2015 2014
Ireland* 20,674 39% 58% 7,961 12,071
Italy 638,383 68% 19% 436,788 120,957
Latvia 14,265 66% 29% 9,475 4,165
Lithuania 37,492 57% 32% 21,473 11,929
Luxembourg 3,254 50% 44% 1,627 1,446
Malta 5,724 52% 38% 2,972 2,202
Netherlands 120,596 50% 38% 59,713 45,663
Poland 295,630 65% 26% 193,064 76,421
Portugal 138,461 43% 49% 58,996 67,424
Romania 102,928 74% 19% 76,243 19,061
Slovakia 57,661 30% 35% 17,298 19,989
Slovenia 7,743 52% 30% 4,060 2,361
Spain 455,663 26% 58% 116,447 263,272
Sweden 59,766 51% 40% 30,705 24,126
UK 189,887 37% 48% 71,001 90,816
EU28 3,596,745 52% 37% 1,852,386 1,316,798
*Data on number of retailers not available for Ireland 2013 and hence, 2012 figures
have been used.
3.2 Potential impacts of alignment and full harmonisation
The proposed Directive on online and distance sales of tangible goods seeks to fully
harmonise the following key mandatory rights and obligations:
A two-year legal guarantee period;
Removal of the obligation of consumers to notify the seller of a defect within 2
months of purchase;
A two-year time-limit for the reversal of the burden of proof;
Hierarchy of remedies (repairs or replacement first, followed by price reduction or
termination of contract and reimbursement of the price).
Government authorities, consumer protection authorities and enforcement authorities,
consumer associations and representatives, but also business associations, all argued in
favour of the principle of alignment of rules between face-to-face sales and distance
sales.
Most stakeholders across all stakeholders groups consulted as part of this study argued
that alignment of the rules between sales channels will lead to higher transparency and
enhanced understanding for both, consumers and traders. It was also said to be logical
as alignment would be driven by the product characteristics per se and not
characteristics of sales channels through which the same products can be sold.
48
While there is consensus on the overall principle of harmonisation among all groups of
stakeholders interviewed, significant differences in views emerged when stakeholders
were asked to comment on the potential impacts of specific consumer protection. A
German consumer association question the advantages of harmonisation given the far-
reaching differences across the EU, arguing that there is a risk that harmonisation could
make consumers in some Member States worse off if it would involve lowering of
consumer protection rules. The different stakeholder categories consulted in the United
Kingdom also point to the risk of lower protection levels if the bar is set too low.
Consumer associations in Germany and the United Kingdom therefore, argued in favour
of raising the minimum protection levels. A European consumer association also
highlighted that harmonisation could ‘significantly weaken’ consumer protection in
several Member States currently going beyond Directive 1999/44/EC. Business
associations on the other hand, argued in favour of harmonisation as a way of simplifying
legislation and reducing burden. Naturally, however, there was wide disagreement
between business associations and consumer associations on what harmonisation should
mean in terms of specific rules, but the general principle was largely supported across all
different stakeholder types.
It is thus, possible that certain trade-offs would play out as a result of full harmonisation.
For instance, EU harmonisation at a level lower than the current protection level in a
particular Member State would at least in theory, decrease consumer protection in that
Member State. On the positive side though, full harmonisation across the EU would
potentially increase transparency and enhance consumer confidence, stimulating cross-
border trade.
3.2.1 Fully harmonised legal guarantee period of two years
3.2.1.1 Benefits
Some stakeholders (i.e. a Dutch ADR body, government authority and consumer
representative, a Bulgarian consumer association and government authorities from
Bulgaria, Greece and Croatia) stressed that harmonised rules would enhance
transparency, which would benefit consumers, for instance by facilitating cross-border
shopping. The Bulgarian government authority stated that a uniform two-year guarantee
period could boost consumer confidence and as a result boost cross-border e-commerce.
More generally, however, although regulatory fragmentation has been seen as a factor
hampering consumers’ (and businesses) propensity to engage in cross-border trade,
some stakeholders (consumer associations from Germany, Italy, Denmark and Romania)
stressed that it is not the most critical factor and pointed to other factors, including
cultural and language differences or concerns about effective enforcement in case of
disputes.
Business associations taking part in the consultation process did not contest a fully
harmonised two year legal guarantee period. Indeed, four sector-wide business
associations taking part in the open public consultation, as well as one Danish business
association, argued in favour of the existing two year guarantee period, stating that it
represents “a fair balance between the interests of consumers and businesses”.
Some business associations cited Commission research in support of their argument
which found that in case of 96% of recent problems with defective goods, the consumers
discovered the defect during the first two years (Table 3.3). As part of the open public
consultation, one of the biggest online retailers reported that 90% of their customers
return damaged goods within the first month of purchase.
49
Table 3.3 Answer to question on how long consumers had the products in their
possession before it turned out to be defective (i.e. age of defective
product)
Less than 1 month
Between 1-6 months
Between 6 months and 1 year
Between 1 year and 2 years
Between 2 years and 3 years
Between 3 and 5 years
More than 5 years
EU28 45% 26% 16% 9% 2% 1% 1%
EU15 44% 26% 17% 9% 2% 1% 1%
EU13 46% 27% 16% 8% 2% 1% 0%
Source: Consumer Market Study to Support the Fitness Check of Consumer Law (lot 3)60
Evidence shows that a significant proportion of consumers perceive the legal guarantees
to be beneficial.61 According to available research62, a third of consumers state that they
had benefitted enormously or considerably from the right to a legal guarantee. However,
when the consumers' use of this right is investigated at country level, we find that,
surprisingly consumers in Member States with longer guarantee periods report benefiting
less from this right compared to the EU28 average (34%). As shown in Figure 9, results
for Ireland, Finland, the United Kingdom, Sweden and the Netherlands (highlighted in
orange shading) are all lower than the average.
60 Consumer market study to support the fitness check of the Consumer Law, European Commission, DG Justice and Consumers, forthcoming. 61 Though it should be noted that also in Member States with a longer legal guarantee period the reversal of burden of proof is still 6 months, and for the remainder of the longer legal guarantee period the consumer will have to prove the defect existed at the time of delivery. 62 Consumer market study to support the fitness check of the Consumer Law, European Commission, DG Justice and Consumers, forthcoming.
50
Figure 9. Percentage of consumers who have reportedly benefitted “considerably” or
“enormously” from the right to a legal guarantee
Question Q9.2: Based on your experience as a consumer, please indicate to what extent
you have benefitted from the following consumer rights – the right to a “legal
guarantee”.
Responses: those selecting “you have benefitted considerably” and “you have benefitted
enormously”.
51
Source: Consumer Market Study to Support the Fitness Check of Consumer Law (lot 3)63
Note: highlighted in orange shading Member States that currently have a legal guarantee
going beyond Directive 1999/44/EC.
Almost half of the respondents (221 respondents or 51%) to the open public consultation
did not respond to the question regarding legal guarantees. Among those who responded
(215), a clear majority (80%) stated that the legal guarantee was “rather beneficial for
consumers” or “very beneficial for consumers”, as shown in Figure 10.
Figure 10. Stakeholder opinion on legal guarantee
Question: In your view, to what extent is the following EU consumer and marketing rule
beneficial to consumers?: Right to have a defective good repaired or replaced for free or
to obtain a price reduction or refund during the legal guarantee period (in most EU
countries 2 years from delivery; longer in some EU countries)
Source: Open public consultation for the Fitness Check of EU consumer and marketing
law, n=436. Other category includes academics.
3.2.1.2 Costs
Two Danish consumer associations, a German consumer association and stakeholders
across all categories from the Netherlands, Sweden and the UK perceived the setting of
the legal guarantee period at two years as potentially detrimental for consumers,
especially in case of those consumers who purchase more expensive goods that are
currently covered by longer legal guarantee period. A UK government authority
welcomed greater consistency as long as it would not lead to an overall reduction in
consumer protection. A European consumer association sees full harmonisation of the
legal guarantee period as detrimental for consumers in Member States currently going
beyond the minimum rules. According to them, many products have an average
durability longer than two years, for example kitchenware, washing machines, or
furniture. They argued that consumers expect that such products will last a long time and
63 Consumer market study to support the fitness check of the Consumer Law, European Commission, DG Justice and Consumers, forthcoming.
52
that they can bring a claim for non-conformity after the proposed two-year period has
passed.
A UK regulatory authority explained that for higher value items, UK retailers (or their
partners) often offer consumer credit or ‘hire purchase’ agreements with a repayment
period of more than two years (e.g. for furniture it is often possible to pay for three years
after delivery, three to five years for cars). Consumers might be more reluctant to enter
into such transactions if the liability period and consequent expectation of durability of
the products were reduced to two years – this could have an effect on the volume of
transactions for some types of products.
According to a UK consumer organisation a considerable proportion of consumers with
faulty goods would have no recourse to the law if the guarantee period were reduced to
two years in the UK. They quoted the findings of their internal research in support of
their argument which found that faults are considerably more likely to develop in certain
types of products (i.e. large domestic appliances) within two to six years of purchase.64
Evidence from another source, however, does not seem to back up this claim. According
to an EU wide study65 presented in Table 3.3 only 4% of consumers reported to have
discovered faults with products which they had products in possession for more than two
years.
The Dutch stakeholders (ADR body, consumer representative and government authority)
favoured harmonisation as a way to enhance clarity but stressed that it would reduce the
rights for consumers of those products that have currently a longer guarantee period
under the existing Dutch system.
Over half of the retailers interviewed for this study (58%) in the 15 Member States
selected for fieldwork state that there would be no impact on their business if a uniform 2
year legal guarantee period were applied, whilst around one-fifth (21%) feel that this
would make for fairer competition between distance retailers and face-to-face retailers
and 13% thought it would lead to lower costs due to rules being aligned for different
channels and harmonised across the EU. 58% of the business however, claimed that
aligned and harmonised rules would have no impact. This may appear as a surprising
result, but it needs to be interpreted with caution as our sample was not designed to be
representative of the population of EU retailers. Moreover, the vast majority of Member
States have a two-year legal guarantee period, so it is possible that businesses see little
additional benefit from harmonisation.
Retailers in Sweden, Finland and the UK – where a longer legal guarantee period exists –
in particular thought that a uniform rule across the EU would lead to lower costs (38%,
35% and 20% respectively), though this view was much less common among retailers in
the Netherlands. At the same time, very few or no retailers in Bulgaria, Greece and
Poland – where a two-year legal guarantee period exists – expressed this view (0%, 4%
and 4% respectively). Retailers from Spain come out most in favour of uniform rules on
the legal guarantee, with 69% of retailers thinking that uniform rules would lead to fairer
competition and only 19% believed it would have no impact.
According European Commission data on economic activity in 2013 there were around
3.6 million retailers in the European Union.66 Overall, it is estimated that over 360,000
retailers in five Member States would be affected by harmonisation of a two year legal
guarantee period, or around 10% of total.67 There would be some transitional costs
involved in adapting terms and conditions, training of staff and adapting complaints
64 Which? (2015) Large domestic appliance reliability survey, base size: 9,055. 65 Consumer market study to support the fitness check of the Consumer Law, European Commission, DG Justice and Consumers, forthcoming. 66 Based on NACE code G47. 67 Referring to the last two columns in Table 3.2, to retailers in Finland, Ireland, the Netherlands, Sweden and the United Kingdom.
53
handling procedures, but harmonisation of the legal guarantee period is also expected to
reduce ongoing compliance costs for retailers Involved in cross-border selling.
3.2.2 Full harmonisation on the reversal of the burden of proof to two years
3.2.2.1 Benefits
Stakeholders cited several different types of potential benefits stemming from the
extension of the period for the reversal of the burden of proof to 2 years.
Although stakeholders did not highlight any specific types of potential benefits over
others, there was a shared view that the measure could increase consumer protection.
Consumer representatives from Greece, Sweden, France and Italy, as well as a Polish
regulatory authority, argued that an extension would facilitate consumer redress.
Consumers were said to encounter many difficulties in providing the required proof (i.e.
due to a lack of expert knowledge, access to legal assistance, financial constraints). A
German consumer association, in its position paper delivered as part of the open public
consultation68, argued that the burden of proof on consumers after six months means
that in certain cases the legal guarantee period can be argued to be only six months
(rather than two years) as enforcement is difficult. It is for that reason that it argued for
a reversal of the burden of proof that is aligned with the legal guarantee period in order
to remove this element of uncertainty, and thus enhance enforcement. Two Swedish
consumer representatives also tied a longer reversal of the burden of proof to the length
of the legal guarantee. A Bulgarian consumer association argued that the lack of
knowledge about the reversal of the burden of proof among consumers means they can
be ill-prepared when confronted with the need to provide proof. It therefore, highlighted
that a reversal of the burden of proof tied to the legal guarantee could simplify the
system and be easier to understand for consumers. In this regard, a Polish regulatory
authority and Spanish consumer association pointed to the extension as an effective
measure in tackling unfair practices that negatively impact consumers in situations where
there a reasons in which it is difficult for the consumer to proof the defect after six
months.
Related to this, a Danish consumer association argued that an extension to two years
would be a ‘big step forward’ in terms of level of consumer protection and specified that
the biggest beneficiaries would be consumers purchasing electronics and home
appliances products. An Italian regulatory authority held that the burden of proof should
be entirely on the seller side as consumers are often unable to provide required proof.
In Member States where a longer period already exists (France, Poland and Portugal),
extending this system across the EU was highlighted by a consumer association in France
and regulatory authority in Poland as a factor increasing the likelihood for consumers to
receive compensation coupled with lower costs of disputes for consumers. However, no
studies have been done on the impacts of such measures in countries where the time
period for reversal of burden of proof is currently longer than six months.
A French government authority and French consumer association expected an increase in
the quality/ durability of products, more effective consumer redress and environmental
benefits related to lower waste from more sustainable products as major benefits for
consumers from the longer period that became effective in March 2016.
The previously cited study by UCF Que Choisir did not find evidence of price rises
resulting from an extension of the reversal burden of proof period from 6 to 24 months69.
There are however, some caveats associated with this study and therefore, not too much
68 Open public consultation for the Fitness Check of EU consumer and marketing law: http://ec.europa.eu/justice/newsroom/consumer-marketing/opinion/160502_en.htm. Results not yet published at the time of writing this report. 69 Que Choisir, May 2016. Extension á 2 ans de la garantie légale: une information du consommateur loin d’être garantie!
54
should be read into this result (the study is based on a before and after observation of
prices rather than any econometric analysis and as such only examines trends; it does
not examine causality. It is possible that other factors might have accounted for the
estimated lack of price impact).
No explicit benefits for businesses were highlighted by any of the stakeholders
interviewed in relation to extension of the burden of proof to 2 years. However, several
stakeholders, in particular consumers’ representatives, stated that such a measure would
limit the number of disputes including those for which expert assessments are needed.
This could therefore, potentially reduce some business costs related to complaints
handling and resolution. However, no studies exist that assess how the costs of this rule
could be offset by a lower numbers of disputes.
Almost half of the respondents (229 respondents or 53%) to the open public consultation
did not respond to the question regarding extended time period for reversal of burden of
proof. Among those who responded (207) to the open public consultation, almost a third
(32%) – mainly consumers and consumer associations - tended to agree or strongly
agree with the statement that “the period during which the defect is presumed to have
existed already at the time of delivery of the good (reversal of the burden of proof)
should be extended”. A higher proportion of respondents (45%) – mainly businesses /
business associations, but also some national authorities and others - tended to disagree
or strongly disagree with this statement.
Which? (a consumer body in the UK) suggests that products such as electrical goods, are
becoming more and more complex, which makes it increasingly hard for consumers to be
able to identify hidden faults or the cause of a fault. They argue that as traders are in a
considerably better position to be able to do so, a longer period for reversal of burden of
proof is justified.
Figure 11. Stakeholder opinion on an extended time period for reversal of burden of proof
How strongly do you agree or disagree with the following statements about the potential areas to improve EU consumer and marketing rules for the benefit of
consumers?: The period during which the defect is presumed to have existed already at the time of delivery of the good (reversal of the burden of proof) should be extended. It is 6 months under current EU law but longer in a few EU
countries
Source: Open public consultation for the Fitness Check of EU consumer and
marketing law, n=436. Other category includes academics
55
3.2.2.2 Costs
With the exception of business associations who indicated that an extension in the time
limit for reversal of burden of proof could result in higher consumer prices, other types of
stakeholders did not foresee any costs or disadvantages for consumers.
Fifteen businesses or business associations responding to the open public consultation
stated that the burden of proof should stay at six months, arguing that in the majority of
cases the defect was discovered by consumers within that period. In their more detailed
responses to the online public consultation, the following arguments were made by
businesses and business representatives against a longer time period for reversal of
burden of proof:
It exposes businesses to the risk of potential abuse by consumers. Retailers would
have to offer repairs, replacement or refund even if a defect was caused by
improper use by the customer. Or else, they would have to incur the costs of
proving conformity against potential improper use/ false claims.
It might encourage ‘moral hazard’ i.e. consumers might be negligent with the use
of product, knowing that the burden of proof would lie with the retailer.
There is a risk that this might result in an increase in consumer complaints and
disputes between retailers and their customers, which could be costly for both.
Some businesses and their representatives suggested that the costs and risks of a longer
burden of proof period would have to be factored into product prices, thus resulting in
price rises for all consumers.
Two European business associations highlighted that a reversal of the burden of proof
going beyond 6 months would impact sellers negatively. Danish, Dutch and German
business associations pointed to the costs related to difficulties in proving whether any
defect existed at the time of delivery and, hence, there is likely to be an increase in the
number of disputes. They also argued that an extension could lead to higher consumer
prices in general because the commercial risks for the trader would increase (increased
risk of repair, replacement and termination/repayment). However, the Danish business
association stated that it is not uncommon that Danish traders will accept to address
consumer complaints without requiring any specific proof from the consumer even after
the 6 month period has elapsed.
A few representatives of consumers in Latvia and Hungary admitted that, although the
extension is favourable for consumers, it may be perceived as excessive by some
businesses.
When considering the responses to the business interviews (see Annex 3), 66% of
respondents stated that there would be some costs involved if a uniform two year period
for the reversal of the burden of proof was introduced for sales via face-to-face and
distance channels, a similar proportion of businesses see no benefit in extending the
period for the reversal of the burden of proof from 6 months to 2 years.
56
Figure 12. Impacts of introducing a uniform two-year period for reversal of burden of
proof
Costs
Benefits
Source: Ipsos business interviews
According to the 2015 Study on legal and commercial guarantees70 both traders (sellers,
manufacturers) and consumers are largely unaware of the existing burden of proof rules.
Only a minority of traders insist on consumers proving the trader's liability within the
entire 2 year legal guarantee period; i.e., there is no/very limited change in traders’
behaviour before or after the 6 months on this point. This means that in the current
guarantee system, traders are de facto applying the principle of burden of proof for the
entire duration of the 2-year legal guarantee period.
However, if the time period for reversal of burden of proof was extended to 2 years in EU
law, it would in theory, affect over 2.3 million retailers in 25 Member States, out of a
total of 3.6 million retailers in the EU, or around 64%.71 There retailers would have to
incur some transitional costs such as adapting terms and conditions, training of staff and
adapting business practices and processes such as complaints handling procedures. It is
also expected to increase ongoing compliance costs for retailers.
3.2.3 No obligation on consumers to notify the seller of a defect within a
specified timeframe (usually two months) of discovering it
3.2.3.1 Benefits
Stakeholders in Member States without an obligation to notify generally highlighted that
its absence ensures higher consumer protection. In this context, a German government
authority and German consumer association highlighted that the lack of such an
obligation reduces additional problems with regards to the process of proving that the
defect had existed for less than two months. The same German consumer association
added that it has benefits for those consumers who do not start using a product
immediately after the purchase.
Higher protection for consumers was a common argument cited in favour of removing the
notification obligation. Certain stakeholders72 pointed to fewer problems related to
enforcement, a smaller number of disputes between consumers and traders, and fewer
opportunities for rogue traders to abuse the fixed period of 2 months. Removing this
70 European Commission, DG Justice and Consumers (2015): Consumer market study on the functioning of the legal and commercial guarantees: the full report is available at: http://ec.europa.eu/consumers/consumer_evidence/market_studies/docs/legalguaranteesfinal_report_en.pdf 71 Referring to the last two columns in Table 3.2, in all Member States except France, Poland and Portugal. 72 For instance a French and Swedish government authority, Polish enforcement authority/ADR centre, a Polish government authority, Swedish, Polish and Danish consumer associations.
57
obligation was also seen as effective and appropriate to address particular cases where
consumers may not be able to notify the seller within two months due to reasons such as
illness. This could potentially translate into reduction in some of businesses’ costs related
to complaints handling and resolution. A Bulgarian consumer association added that as it
is considered difficult for traders to assess whether the consumer really has returned the
product within two months of discovering the effect, it would be more practical and
simpler to remove the obligation. Business associations, however, did not highlight any
advantages of not having a notification obligation.
In relation to the specific benefits outlined above, a UK government authority indicated
that having no obligation means that there is no ‘cliff edge’, whereby if a consumer
notifies a day too late, he/she loses his/her rights entirely. The UK government authority
also considered that having no obligation ensures higher standards among traders. In
Sweden, where there is a notification obligation within a reasonable timeframe, a
government authority pointed to the need for flexibility when a customer is unable (for
instance, due to illness) to return the product within two months of discovering the
defect.
Three consumer representatives from Croatia, as well as a Croatian government
authority, all highlighted that the notification obligation is complex for both sellers and
consumers and potentially creates confusion and all argued to abolish this provision.
The potential impact from removing the notification obligation within two months should
also be assessed in light of anecdotal and survey evidence on the action taken by
consumers when a defect is discovered. A Danish consumer representative suggested
that virtually all consumers ‘react very fast when problems with the product occur’. A
similar view was expressed by a French and German consumer association and a Dutch
regulatory authority. This finding was also confirmed by the legal and commercial
guarantees study73, which showed that consumers had taken action for 84% of the
problems encountered (e.g. they took the product back to the seller or manufacturer)
and that the majority of consumers took action within one week of occurrence of the
problem.74
It is however, worth bearing in mind the results of the statistical analysis presented in
Section 2, which showed that in Member States where consumers have an obligation to
notify the defect, a relatively higher proportion of consumers receive redress and
consumers generally suffer lower level of net financial detriment (and other costs
associated with the problem of defective goods such as administrative follow-up, legal
follow-up and product follow-up costs). Nonetheless, as previously explained, causal
inferences cannot be drawn from the statistical analysis. It is plausible that there are
other factors at play in countries that have a notification obligation (such as better
complaints handling and redress mechanisms) that result in a higher share of consumers
obtaining redress and lower net financial detriment.
3.2.3.2 Costs
All business associations consulted, as well as Latvian and Croatian government
authorities were of the opinion that if there no obligation on consumers to report defects
within a specified and reasonable time frame, it would lead to an increase in traders’
operational costs.
A Danish business association expressed the view that this would encourage some
consumers to procrastinate in notifying a trader of a problem and lead to a situation
where consumers continue to use a faulty product, which in turn can lead to
consequential loss/damage and higher costs for traders to fix the defect. For instance, a
73 Ipsos (2015) Consumer market study on the functioning of Legal and Commercial Guarantees for consumers in the EU, p.156. 74 Ibid.
58
failure to replace a faulty fan in a computer system may result in (permanent) damage to
the system. A similar logic was presented by a Dutch business association.
A German business association expressed the view that the lack of a notification
obligation could lead to potential misuse by some consumers. As part of the open public
consultation two German business associations explained that a consumer who has
known about a defect for quite some time could have the possibility to use the good for
‘free’ and without risk and could still put in a claim against the trader. An Italian business
association highlighted that by removing a first filter of cases brought to sellers, there
could be a significant rise in the number of disputes to handle.
The rise of misuse by consumers is perhaps being overstated by businesses, when
looking at evidence from other sources. According to the 2015 Study on legal and
commercial guarantees75, depending on the type of product, between 37% and 58% of
problems were followed up immediately by consumers when the problem occurred, while
between 25% and 32% of problems were followed up within one week.
When looking at the results from the business interviews (see Annex 3), opinions were
split as regards the potential costs and benefits of removing the notification obligation,
with 29% of respondents stating that the removal of this obligation would impose major
costs and 30% stating it would impose no costs. In Bulgaria, only 3% stated that this
would impose major costs versus 48% in Finland, 46% in Greece and Poland, and 44% in
Germany. Again, very few retailers thought this change would lead to any benefits, with
69% stating that this would result in no benefits, a view that was most prevalent in
Germany (84%) and Austria (79%).
Figure 13. Impacts of removing the obligation on consumers to notify seller of defects
within a specified timeframe
Costs Benefits
Source: Ipsos business interviews
Overall, it is estimated that just over 1.8 million retailers in 21 Member States would be
affected by this change of rule, or around half of the 3.6 million retailers in the EU. 76
There would be some transitional costs involved for these businesses e.g. adapting terms
and conditions, training of staff and adapting business processes and practices such as
complaints handling procedures. The impact of having no notification obligation on
ongoing compliance costs cannot however, be ascertained with certainty on the basis of
available evidence.
75 European Commission, DG Justice and Consumers: Consumer market study on the functioning of Legal and Commercial Guarantees for consumers in the EU. 76 Referring to the totals of the last two columns for all Member States except those going beyond the Directive (Austria, France, Germany, Greece, Ireland, Poland and United Kingdom).
59
3.2.4 Uniform rules on the hierarchy of remedies
3.2.4.1 Benefits
Views among consumer associations and government authorities that a hierarchy of
remedies as opposed to a free choice of remedies would generate benefits for consumers
were very rare, except for ensuring clarity in case of cross-border shopping. A German
business association, where there currently is a hierarchy of remedies, stated that a
hierarchy of remedies allows traders to offer lower prices to consumers.
Although expressed only indirectly by stakeholders, it appeared plausible to consumer
associations across the board that harmonisation could enhance the transparency of rules
and hence consumers’ confidence and ultimately cross-border shopping. In Hungary,
which also has a hierarchy of remedies, a consumer representative stated that
harmonisation would neither bring meaningful benefits nor imply and costs or
disadvantages for Hungarian consumers.
In general, business associations typically pointed to a hierarchy of remedies as a well-
balanced and reasonable arrangement that gives traders the opportunity to address the
defect (i.e. via prompt repairs) without being forced to proceed with more costly forms of
remedies (i.e. full refund). This perspective has also found support among a Latvian
government authority and Danish representative of consumers. It was also raised in the
open public consultation, where seven businesses or business associations stated that
that the current approach to remedies in case of non-conforming goods should be revised
to clarify the hierarchy of remedies approach and allow the trader to choose the most
cost-effective option. Business stakeholders generally argued that the termination of a
contract should be the last resort, or not available at all in the case of minor defects.
As part of the open public consultation, a German business association pointed out in its
position paper that repairs should always take precedence over replacement in view of
resource efficiency and to reduce environmental impact, unless this would be
disproportionate or impossible. It argued that this may help to promote more durable
products and contribute to a circular economy.
As part of the open public consultation, a German business association considered a
hierarchy of remedies to be indispensable, especially for high-value products. It argued
(from the perspective of a counterfactual) that having a free choice of remedies would
lead to increased operating costs and higher prices of products, though no evidence is
available to support this view.
3.2.4.2 Costs
In general, a number of stakeholders (i.e. a Polish regulatory authority, Polish
government authority, Danish and Greek consumer associations) stated that the
introduction of a harmonised rule in the form of a hierarchy of remedies would reduce the
level of consumer protection in Member States currently offering a free choice of
remedies.
Data from the Consumer Market Study to Support the Fitness Check of Consumer Law
(lot 3)77shows that 45% of consumers report that when a good is defective they always
exercise the right to immediately terminate the contract, while 35% report using this
right after the seller’s first repair or replacement of the good does not solve the problem.
This suggests that a relatively larger share of consumers prefer a free choice of remedies
in case a good turns out to be defective.
Furthermore, in line with what the UK regulatory authority and a Polish government
authority argued, a hierarchy of remedies could increase the time needed for effective
redress for consumers (i.e. due to ineffective repairs) while a UK government authority
77 Consumer market study to support the fitness check of the Consumer Law, European Commission, DG Justice and Consumers, forthcoming.
60
added that scrapping the free choice would hamper competition among traders. Both also
indicated that the costs of shifting from a free choice regime to a hierarchy of remedies
would be higher for distance and cross-border consumers or for certain types of products
where the lack of immediate redress could cause consumer detriment (e.g. prams).
In its recent position paper, BEUC78 opposes a hierarchy of remedies across the EU,
arguing that this would fundamentally weaken the protection of consumers, e.g. in the
United Kingdom and Ireland where consumers have the “short term right to reject”.
BEUC argues that “the right to reject a faulty good is well-established, well-understood
and ingrained in public. Its abolition would clearly hamper consumers’ ability to ask for a
replacement or demand a full refund. It would also mean that consumers would be
discouraged from making another purchase from a different trader within a short
timeframe.” They quote a Which? survey conducted in December 2015 showing that
nearly 90% of Which? members expect to be able to exercise a short-term right to reject
in the UK.79 Two consumer associations responding to the open public consultation also
argued that free choice would be a fair legislative response to misconduct from traders
and that a hierarchy of remedies would be detrimental.
A UK government authority also defended the short term right to reject by citing
research carried out by the UK’s independent Law Commission in 2009 which found that
the short-term access to a refund when exercising a right to reject goods inspires
consumer confidence (89% of consumers said it should be retained alongside other
remedies) when buying unfamiliar brands or at smaller shops, boosts competition and
drives up product standards80.
In terms of the costs of applying a harmonised rule across the EU, these are likely to be
limited considering that only seven Member States currently offer free choice of
remedies/ short term right to reject. Based on the findings presented in Table 3.2 in
section 3.1.3 it is estimated that just over 510,000 retailers in the EU (out of a total of
nearly 3.6 million) would be affected by a harmonised hierarchy of remedies, or nearly
14%.81 Retailers selling via face to face channels in these countries would have to adapt
their operations to the new rules. There would be some transitional costs involved in
adapting terms and conditions, training of staff and adapting complaints handling
procedures. However, in the longer term retailers in these Member States might face
reduced compliance costs (the balance of evidence suggests that it is more costly for
businesses to offer a free choice of remedies as compared to a hierarchy of remedies).
3.3 Impact on cross-border activity and the Single Market
During the interviews with businesses, they were asked to indicate the extent to which
they agree or disagree with a set of statements relating to the potential impacts of full
harmonisation of EU rules. The results are presented in Table 3.4.
There were not very large differences in responses according to company size.
Representatives of medium-sized enterprises, however, were more likely to state that: a
single set of rules will increase competition in the retail sector in the EU; a single set of
rules will increase competition in their domestic market from retailers based in other EU
countries; a single set of rules will lead to reduced margins for retailers; and that an
increase in the reversal of the burden of proof period (i.e. sellers must prove that the
item was not defective for the entire duration of the legal guarantee) will increase the
quality and durability of goods.
78 BEUC (September 2016): http://www.beuc.eu/publications/beuc-x-2016-081_csc_fitness_check_of_eu_consumer_law_2016_beuc_position.pdf
79 Unpublished. 80 The Law Commission and The Scottish Law Commission (2009) Consumer Remedies for Faulty Goods 81 Referring to the last two columns in Table 3.2 in Croatia, Greece, Ireland, Lithuania, Portugal, Slovenia and the United Kingdom.
61
There were no noteworthy differences in responses by sales channel, although it should
be noted that the number of responses from retailers involved in distance sales only was
very low.
Table 3.4 Business feedback on the impacts of full harmonisation of rules across
the EU
Stron
gly
agree
Agr
ee
Neith
er
agree
or
disag
ree
Disag
ree
Stron
gly
disag
ree
Do
n’t
kn
ow
stron
gly
agree
/
agree
Strong
ly
disagr
ee/
disagr
ee
A single set of rules will increase competition in
the retail sector in the EU
20% 34% 19% 16% 7% 4% 54% 23%
A single set of rules will increase competition in
our domestic
market from retailers based in other EU countries
16% 36% 21% 16% 7% 5% 52% 23%
A single set of rules will result in lower prices for consumers
9% 23% 18% 29% 16% 5% 32% 45%
A single set of rules will lead to
reduced margins for retailers
18% 31% 18% 19% 8% 6% 49% 14%
The increase in the reversal of the burden of
proof period will increase the quality and durability of goods
12% 29% 17% 22% 15% 5% 41% 37%
The reduction in
the legal guarantee period in countries that now have a
longer period will reduce the
quality and durability of goods in these countries
11% 22% 13% 30% 16% 8% 33% 46%
Source: Ipsos business interviews
62
In addition, it should be noted that according to five business associations and
businesses who commented as part of the open public consultation, minimum
harmonisation of the Directive created barriers to cross-border trade and that
harmonisation would bring simplification.
3.4 Summary and conclusion
There is strong support for alignment of rules for face-to-face and distance sales among
all stakeholder groups (consumers, businesses and national authorities). Alignment of
rules is seen as avoiding confusion between different sales channels, reducing
complexity, facilitating cross-border sales, increasing competition and reducing traders'
compliance costs and prices.
There are, however, some elements that need to be carefully taken into account, when
considering harmonisation of the following rules, particularly the impact on Member
States who are currently going beyond the minimum EU rules:
A uniform legal guarantee period of 2 years (five Member States currently go
beyond the minimum rules): particularly, in the UK and Ireland, but also in
Finland, Sweden and the Netherlands this is seen as a potential reduction in the
level of consumer protection. Statistical analysis based on available consumer
survey data shows that in countries with longer guarantee periods, respondents
were more likely to have obtained redress and respondents reportedly spent less
time on resolving the problem, thus indicating higher levels of consumer
protection in these countries.
In the Netherlands however, the current system of guarantees which varies
according to the expected average lifespan of a particular product appears not to
be working well, and there appears to be relatively less resistance to EU level
harmonisation.
According to the 2015 Consumer market study82 on the functioning of legal and
commercial guarantees for consumers in the EU between 34%-43% consumers
consider that a 2-year legal guarantee period is reasonable for white, brown and
grey goods. Consumers in countries going beyond the minimum EU rule of legal
guarantees are generally not well aware of the longer legal guarantee period in
their respective countries83. This finding is further backed up by the Consumer
Market Study to Support the Fitness Check of Consumer Law (lot 3)84which found
low awareness of the legal guarantee period85 in countries going beyond the
Directive, as well as the business interviews carried out by this study.
Furthermore, more evidence suggests that the vast majority of the defects
become evident within the first two years of purchase – even in the case of
durable products. According to the Consumer Market Study to Support the Fitness
82 Consumer market study on the functioning of legal and commercial guarantees for consumers in the EU
Country fiche: Belgium, Ipsos, Deloitte, London Economics, 2015: http://ec.europa.eu/consumers/consumer_evidence/market_studies/docs/legalguaranteesfinal_report_en.pdf 83 Ireland has a legal guarantee period of six years and the UK has two different limitation periods: six years in England, Wales and Northern Ireland, five years in Scotland. Virtually none of the respondents in these two countries were aware of this fact (about 1%). A majority of respondents in Ireland (61%) thought that the legal guarantee period was 12 months; the corresponding figure for the UK was 53%. In Sweden, the duration of the legal guarantee is three years; however, just 7% of respondents were aware of this longer duration; compared to 36% of respondents who thought that the legal guarantee period was one year. 84 Consumer market study to support the fitness check of the Consumer Law, European Commission, DG Justice and Consumers, forthcoming. 85 These were 4% in Ireland, 6% in the UK, 7% in the Netherlands, 15% in Finland and 19% in Sweden.
63
Check of Consumer Law (lot 3)86, 96% of the consumers who had encountered the
problem of defective products, reported that the defect was detected within 2
years of purchase (71% of the consumers found the defect within 6 months of
purchase).
Hierarchy of remedies (seven Member States currently offer a free choice of
remedies, including the UK and Ireland, where there is a short-term "right to
reject"): consumer associations, including BEUC, oppose a hierarchy of remedies
across the EU as in their view it would reduce consumer protection in countries
currently offering a free choice of remedies/ short term right to reject goods.
Statistical analysis based on survey data shows that in Member States with a free
choice of remedies, consumers are more likely to experience problems relating to
defective goods but at the same time consumers are likely to experience lower
levels of net financial detriment.
In the UK, the short-term right to reject has strong support among national
authorities and consumers alike. However, at an EU level, roughly three-quarters
(77%) of consumers agreed that it was reasonable for a seller to offer a repair or
replacement, but not a refund, when a problem with a product occurs for the first
time (2015 study on legal and commercial guarantees). Moreover, a free choice of
remedies would likely be expensive for retailers, especially for those selling high
value and/or durable products such as cars, electronics such as laptops. For
example, it would create significant costs for a car dealer if they were to offer a
replacement or refund for car, if certain parts (e.g. wing mirror) turned out to be
defective. Business associations often argued that a full refund would be
disproportionate.
The extension of the period for the reversal of the burden of proof to 2 years:
In contrast to representatives of businesses, who reject an extension as
excessively long and placing a disproportionate burden on sellers, other
stakeholders such as consumer protection authorities, relevant national ministries
and consumer associations are in favour of this citing benefits of such extension
(such as improved quality and durability of goods and associated environmental
benefits), increased likelihood of consumers obtaining redress, lower number of
disputes). However, practical experience with such rule is limited. According to the
2015 Study on legal and commercial guarantees, the majority of businesses do
not insist on consumers proving defects within the entire two-year legal guarantee
period, and there is very limited change in business’ behaviour before or after the
6 months on this point. Therefore, the principle of reversal of burden of proof is
already applied by many de facto throughout the entire two-year legal guarantee
period, and thus the practical impact on businesses of possibly temporarily
divergent rules on this point would not be significant. Analysis of data from the
ongoing Consumer Market Study to Support the Fitness Check of Consumer Law
(lot 3) also showed that in Member State with a longer time period for reversal of
burden of proof, a higher number of consumers receive redress.
Removing of the obligation of consumers to notify the seller of a defect
within 2 months of discovery: there were two clearly diverging perspectives.
On the one hand, some stakeholders (in particular consumer protection authorities
and consumer associations) support the removal of a notification obligation
arguing that such a move would increase consumer protection and reduce
consumer detriment caused by some traders who may abuse this time-limit87.
86 Consumer market study to support the fitness check of the Consumer Law, European Commission, DG Justice and Consumers, forthcoming. 87 For instance by leading unaware consumers to state that they discovered the defect earlier and then refusing to provide a remedy
64
On the other hand, business associations favour a 2- month notification period and
oppose its removal by arguing that it would result in consumers procrastinating with
their claims and hence making remedy related actions such as repair more costly.
Businesses also highlighted the potential risk of abuse by consumers. Statistical
analysis – based on survey data - shows that in Member States where consumers
have an obligation to notify the defect, a higher number of consumers receives
redress and consumers generally suffered lower level of net financial detriment,
although these results need to be interpreted with caution as they do not indicate
causality.
Overall, the impacts of harmonisation and alignment are likely to vary across Member
States. In any event, even where the current levels of consumer protection would
decrease on some dimensions (e.g. regarding the legal guarantee period or the
hierarchy of remedies), they would increase on other dimensions (e.g. extension of
the period for the reversal of the burden of proof, removal of notification obligation).
On balance, alignment (of rules for offline and distance channels) and full
harmonisation would have an overall positive impact on consumers and businesses in
the Single Market, most notably in the form of increased competition through greater
cross-border activity. Indeed, a potential lack of alignment of rules for different sales
channels could cause confusion among consumers, generate additional costs for
businesses, and create market distortion between face-to-face and omni-channel
retailers.
65
Annex 1 Further data of the legal framework in Member States and case law findings
National differences in the transposition of the Directive have led to differences in
national interpretation and enforcement, which in turn have created inconsistencies and
uncertainties in relation to the effects of the Directive. A review of some case-law in the
Member States selected for legal analysis (see also Section 1.4) – especially in cases
where Member States went beyond the Directive – demonstrates differences between
Member States on the provisions of the Directive, especially those going beyond the
minimum rules laid out by the Directive, as well as different national approaches
concerning the same provisions of the Directive. It should be pointed out that as 15
Member States were selected for review of case law, there are no findings for the 13
other Member States not selected. This should be kept into consideration when assessing
the findings presented below.
The examined case-law, administrative guidelines and dispute resolution decisions are
posterior to the EC consumer law compendium88. They include cases which clarified the
application of the Directive, or which are important precedents at national level. This
Annex should be read in conjunction with Section 2.1, and specifically Table 2.2.
A1.1 Length of legal guarantee
The majority of the Member States studied have retained the Directive’s minimum two-
year length of legal guarantee, as also shown in Table 2.2. The exceptions are Sweden (3
years), Finland and the Netherlands (where no fixed time limit applies) and Ireland and
the United Kingdom (with no specific legal guarantee period and where the seller's
liability is limited by the general prescription period for contractual claims).
In the United Kingdom, under the Limitation Act 1980 contractual claims are statute
barred after six years (except Scotland where the limit is 5 years). However, as clarified
by the UK government this does not mean that goods have to last six years; it is not a
durability requirement. “A consumer could bring a case against a retailer, alleging non-
conformity of contract, for up to six years after the sale. However, he would find a court
unsympathetic for low cost items that it was reasonable to expect to last only a short
period (a £5 watch might not last many years but a £500 one should) or for consumables
like oil filters which have a specified limited lifespan”89.
In the Netherlands, the two years guarantee has been implemented by the legislation but
this protection is improved upon by the previous legislation specified in the Dutch Civil
Code (DCC) in its Book 7. This states that the guarantee depends on the average
expected lifespan of a product in normal use90. In particular, Article 7:23 § 2 of the DCC
provides that the “Rights of action (legal claims) and defences, grounded on facts which
would justify the conception that the supplied object is not in conformity with the
agreement, become prescribed on the expiry of two years after the report has been
made in accordance with the first paragraph. Yet, the buyer preserves, as a defence
against a right of action (legal claim) to obtain payment, the right to appeal to a price
reduction or a compensation for damages”91. Therefore, the legal action becomes
statute-barred after two years from the notification of the lack of conformity, but the
consumer retains action for price reduction and damages. The Socio-economic Council of
88 EC Consumer Law Compendium - Comparative Analysis - Edited by Prof. Dr. Hans Schulte-Nölke in co-operation with Dr. Christian Twigg-Flesner and Dr. Martin Ebers February 2008. 89 Department of Trade and Industry Consumer and Competition Policy Directorate, The Sale and Supply of Goods to Consumers Regulations 2002 A Brief Introduction. 90 Consumer market study on the functioning of legal and commercial guarantees for consumers in the EU
Country fiche:the Netherlands, Ipsos, Deloitte, London Economics, 2015. 91 Burgerlijk Wetboek (Dutch Civil Code) Book 7, Article 7:23 §2.
66
the Netherlands92 argued that the two-year liability time-frame enhances legal certainty
for the seller; it also acts as a cut-off limit, but deviation for both, a shorter and longer
period may be fair and reasonable. The Geschillencommissie93 has ruled that the
economic lifetime of a dishwasher was six years during which time the consumer was
entitled to the legal guarantee and the seller could not ask the buyer to bear half of the
costs of repair because two years had passed94. The Dutch Consumer Authority (ACM), in
its decision on 6th July 201095, condemned the practice of the sellers which seem to
systematically limit the availability of remedies to two years, even in case of goods with
an expected lifetime of 3-5 years. The ACM decision has been upheld by the competent
court.96
The Finnish Consumer Dispute Board (CDB)97 has adopted various decisions on the
different length of the guarantees. The CDB has also published Guidelines for different
typologies of products to help the seller and consumer to orientate98, which are based on
the provisions of consumer legislation, Ombudsman’s own practices as well as the
decisions of the Market Court and other supervisory authorities. As clarified by the
Finnish Competition and Consumer Authority, the key issue is the expectations of the
consumer. The estimation of whether the good is defective and what is the expected
lifespan of a good is always based on an overall assessment, taking into account the
quality and quantity of the good. In case of a PlayStation console, the CDB considered
that the average operation time was more than the legal guarantee of two years and the
buyer was entitled to reparation or reimbursement even after the legal guarantee period
had expired99. Similarly, it has considered that the lifespan of a car heater was more than
two years 100.
A1.1.1 Second-hand goods
A total of 12 Member States101 have implemented the option provided by Article 7(3) of
the Directive allowing the seller and the buyer to agree on a shorter time-limit for
second-hands goods. In this case, the minimum legal guarantee duration cannot be less
than one year. This provision is relevant for a full understanding of the legal guarantee
period.
It is worth noting that the Austrian courts have added a requirement that used goods are
not allowed to be new, but must effectively be used. This possibility does not concern
goods which are not new but have not been used, such as “exhibits”. According to the
92 Sociaal-Economische Raad, Commissie Consumentenaangelegenheiden, ‘Verkoop van en waarborgen voor consumptiegoederen’, Advies 98/03, p 29-33 available at https://www.ser.nl/~/media/db_adviezen/1990_1999/1998/b16091%20pdf.ashxCouncil.
93 Dutch Arbitral Body for Consumer Affairs.
94 Decision 53144.
95 See: https://www.acm.nl/nl/publicaties/publicatie/7515/Besluit-op-het-bezwaar-van-BCC-tegen-openbaarmaking-van-de-beslissing-op-bezwaar-sanctiebesluit/ Although the two year period given in the Directive is found in the Dutch legislation, this protection is improved upon by the previous legislation specified in the Civil Code in its Book 7. This states that the guarantee depends on the average expected lifespan of a product in normal use. This means, for instance, if a washing machine is expected to have an average 10 year life span, the statutory rights are available to the consumer for the same amount of time. In NL, there is a two years limitation period, but starting from the notification of the defect (Article 7:23(2) BW). This period thus begins after the delivery, and then it is more favourable to the consumer than the directive.
96 ECLI: NL: CBB: 2015:194.
97 The CDB is the competent authority to resolve disputes and enforce consumer protection law.
98 The Guidelines are based on the decisions and precedents of the CDB: http://www.kkv.fi/en/decisions-and-publications/publications/consumer-ombudsmans-guidelines/by-subject/statutory-liability-for-lack-of-conformity-and-guarantee-in-the-sale-of-consumer-goods/
99 CDB decision of 5.1.2015;
100 CDB decision 14.11.2014
101 AT, BE, HR, CY, CZ, DE, IT, LU, PL, PT, RO, SK, SI.
67
court, antiquities are not covered by this exemption but by the exemption under Article
1(3) of the Directive if they are sold at public auction102.
Concerning the legal guarantee for the antiquities sold outside auctions, a Belgian court
has excluded the protection under the legal guarantee in case of lack of authenticity of
the good. The court considered that the lack of authenticity, which is an essential
element of antique pieces, cannot be considered as lack of conformity and therefore the
buyer was not entitled to the remedies provided by the national law implementing the
CSG Directive.103
A1.2 Reversal of the burden of proof
Three Member States (France, Poland and Portugal) have a longer time period
for the reversal of the burden of proof than the six months stipulated in the CSG
Directive, as shown in Table 2.2 in Section 2.1.
In France, the reversal burden of proof has been recently extended to two years by the
Law on Consumption (or Hamon Act, n° 2014-344 du 17 mars 2014). This will not be
applicable to second hand goods, nonetheless. Similarly, in Portugal, the reversal of the
burden of proof is two years104 while in Poland105 it is one year.
It has to be noted that the reversal burden of proof does not exempt the buyer from
proving the existence of the fault106. In Germany, the Supreme Court clarified that the
buyer had to establish and prove the existence of a fault within the meaning of § 434
BGB (Bürgerliches Gesetzbuch – German Civil Code). The reversal of the burden of proof
for consumer sales according to § 476 BGB (which implements Art. 5 (3) Consumer Sales
Directive 1999/44/EC) in the view of the court merely gives rise to a presumption that an
existing (proven) fault occurring within six months of passing of risk was already present
at the time of passing of risk107. Similarly, in Austria, the courts have clarified that the
legal presumption, that a defect arising within six months after delivery has already
existed at delivery, does not affect the burden of proof regarding the existence of a
defect. The existence of a defect has to be proved by the consumer.108.
A1.3 Notification obligation
The notification obligation, as can be observed in Table 2.2 of this report, exists in most
of the Member States except Austria, France, Ireland, Greece, Germany, Poland and the
United Kingdom.
Article 5(2) of the Directive provides that “Member States may provide that, in order to
benefit from his rights the consumer must inform the seller of the lack of conformity
within a period of two months from the date on which he detected such lack of
conformity”. A number of Member States have used the option to implement the
notification time-limit (see Table 2.2 in Section 2.1).
However, in certain Member States, a question remains open concerning the possibility
for the consumer to request a remedy after the two agreed months have passed without
having informed the seller of the lack of conformity.
In Belgium, where the legislation leaves the two-month notification to the sole discretion
of the parties109, according to the preparatory works of the implementing legislation110,
102 Kathrein/Schoditsch in KBB4 § 9 KSchG mn. 6. 103 Tribunal de première instance de Bruxelles, 2 janvier 2012 (R.G. 2010/3852/A). 104 Article 3 (2) of the Decree Law 67/2003 as amended by Decree Law 84/2008. 105 Article 556(2) of the Civil Code (z dnia 23 kwietnia 1964 r. (Dz.U. tłum. gb Nr 16, poz. 93) 106 As also confirmed by the ECJ in judgement of 4 June 2015, case C-497/13, Froukje Faber, point 75, ECLI:EU:C:2015:357. 107 BGH, Urteil vom 2. 6. 2004 - VIII ZR 329/03 (OLG München) 108 OGH, 8Ob124/08f, 13.11.2008. 109 Consumer market study on the functioning of legal and commercial guarantees for consumers in the EU
68
the non-respect of the agreed period for the notification obligation does not prevent the
consumer from acting against the trader for lack of conformity111. The preparatory works
of the Belgian parliament clearly underlines that the legislator did not included, on
purpose, any sanction for the lack of notification within two months, in order not to
impose on the consumer the contractual responsibility for the lack of notification112.
However, while some commentators agree with this interpretation, others seem to
interpret it in the opposite sense, namely they consider that the buyer who omits to
inform the seller within two months loses the right to invoke the legal guarantee for the
lack of conformity113. No case law on this point could be identified when drawing up this
report.
In Spain, some courts have ruled that the lack of notification within two months does not
prevent the consumer from claiming the legal guarantee114.
A1.4 Hierarchy of remedies
The majority of Member States have introduced a hierarchy of remedies, while Croatia,
Greece, Lithuania, Slovenia and Portugal give a free choice to consumers, as set out in
Table 2.2.
The United Kingdom has introduced a hierarchy of remedies but provides for an
additional remedy, the short-term right to reject. The consumer has a legal right to reject
goods that are of unsatisfactory quality, unfit for purpose or not as described and get a
full refund. After the adoption of the Consumer Rights Act 2015, this right is limited to 30
days from the date the consumer buys the product, unless the expected lifespan of the
goods is shorter (e.g. in the case of highly perishable goods)115. The CRA 2015 clarified
the tiered structure of the various remedies available. In case of lack of conformity, the
buyer has 30 days to reject the good and claim the full refund. The consumer is entitled
to treat the contract as terminated and to receive a refund, but must make the goods
available for collection by the trader. The short term right to reject does not apply where
the breach only relates to incorrect installation.
If the short - term right of reject is not exercised, it leads to right of repair or
replacement. In case these are not satisfactory, then there is the right to a price
reduction or a final right to reject (and claim a refund) (after only one failed attempt for
repair or replacement by the trader, meaning that one attempt is enough for the
consumer to have this right). Where the goods are rejected after the first six months, the
trader can reduce any refund by a "deduction for use"; during the first six months any
deduction for use is limited to motor vehicles or other goods the Secretary of State may
specify in the future.
According to the Law Commission, in its report for the reform of the Sales of Goods Act
and on the possibility to retain the right of reject in the UK system, “the 30-day period is
Country fiche: Belgium, Ipsos, Deloitte, London Economics, 2015. 110 Rapport de la Commission, Sénat 2003-2004, nr. 3-722/3, 14-15. 111 Cruysmans et al, Les defauts de la chose: Responsabilités contractuelle et extracontractuelle, Anthemis 2015, Chap. « Le défaut de la chose vendue selon le régime de la garantie des biens de consommation », Y.Ninane 112 Project de Loi, Rapport, Doc. parl. Sénat, sess 2003-2004, n° 3-772/3 p.15. 113 R. STEENNOT La sécurité du consommateur – Rapport Belge, University of Gand, p. 7 « Contrairement au Ministre, nous pensons que les conditions contractuelles peuvent déterminer que le consommateur, qui n’informe pas le vendeur dans le délai convenu, perd la possibilité de se prévaloir de la garantie légale prévue par cette loi. En l’absence d’une clause quelconque, la méconnaissance de cette obligation contractuelle ne semble pas avoir de conséquences ». In this sense, also: J. STUYCK, “La notion de conformité et l’articulation des délais”, in C. BIQUETMATHIEU en P. WÉRY (ed.), La nouvelle garantie des biens de consommation et son environnement légal, Brugge, Die Keure, 2005, 124 ; A. VERBEKE, De termijnen”, in S. STIJNS en J. STUYCK (eds.), Het nieuwe kooprecht. De wet van 1 september 2004 betreffende de bescherming van de consumenten bij verkoop van consumptiegoederen, Antwerpen, Intersentia, 2005, 95 114 SAP Zamora (1ª) 237/2009, de 1 de octubre, AC 2009/2255. 115 Section 20(1) and 22 of the Consumer Rights Act.
69
a standard period and not an absolute fixed period, so that account can be taken of
circumstances rendering it reasonably foreseeable that the consumer will need longer
than 30 days to test the goods in use. A typical example would be double-glazing fitted in
summer. The consumer would need longer than 30 days to check that it was watertight
in storm conditions”116.
A1.4.1 Lack of conformity being minor
There is a lot of disparity among Member States (and within individual Member States)
concerning the interpretation of the notion of minor conformity (defect), which does not
entitle the consumer to the rescission of the contract117. In Germany, some courts have
considered that the conformity is not minor if the cost for remedying exceeds 5% of the
purchase price118, while in another court case minor conformity was considered to be up
to 1% of the purchasing price119. In a court case in Spain, a defect which amounted to
EUR 1,876 over EUR 9,500 of the price of the good did not entitle the customer to
rescission120.
In France, rescission for minor conformity was ruled possible (without the court
quantifying the severity of the defect) if the buyer proves that the repairs were not
possible due to the refusal of the seller to provide a solution121.
116 The Law Commission and the Scottish Law Commission, Remedies for Faulty Goods, November 2009, para 1.32, p. xii. 117 Article 3(6) of Directive 1999/44/EC. 118 BGH NJW 2014, 3229 Rn. 30 = JZ 2015, 145 mAnm Faust, cited in BeckOK BGB/Faust BGB § 437 Rn. 4-6. 119 NJW 2011, 2872 Rn. 19: cited in BeckOK BGB/Faust BGB § 437 Rn. 4-6). 120 SAP Madrid (14ª) 29/2016, de 2 de febrero, JUR 2016/74415. 121 Cass, 1er cvi, 30 April 2014, 12-29895.
70
Annex 2 Analysis of consumer detriment
Consumer detriment or harm arises when market outcomes fall short of their potential,
resulting in welfare losses (financial, health, etc.) for consumers. A 2007 study on
consumer detriment122, widely recognised as an important contribution to the
development of the concept of consumer detriment, establishes two distinct forms of
consumer detriment:
Personal detriment: negative outcomes for individual consumers, relative to
reasonable expectations;
Structural detriment: the loss of consumer welfare (measured by consumer
surplus) due to market failure or regulatory failure.
A key difference between structural and personal consumer detriment is that while the
former affects an individual in a specific transaction, the latter arises from a structural
problem that affects an entire market or sector. Personal detriment occurs ex-post, after
the purchase or the transaction, but may originate in pre-contractual marketing practices
that make the consumers experience negative outcomes. Assessing personal detriment
(arising from unsuitable purchases, consumer error and ill-informed choices) is
particularly useful when evidence is needed on how structural detriment may change and
where it is difficult to quantify structural detriment itself, since recent attempts at
measuring structural detriment encountered serious difficulties in defining an appropriate
benchmark.
Within the scope of personal consumer detriment, the distinction can be made between
financial and non-financial detriment. Each of these concepts is explained below.
A2.1.1 Financial detriment
Financial detriment can be defined as the monetary costs and losses incurred by the
consumer as a result of a problem relating to a good or service that fell short of what one
might reasonably have expected at the time of purchase or use. When measuring
consumer detriment, we distinguish between two concepts: gross and net financial
detriment.
Gross financial detriment or pre-redress financial detriment covers all financial losses
suffered by consumers as a direct result of the problem(s) experienced. These include:
Cost of the original product;
Costs associated with the reduced functioning of the goods concerned as a result of
the problem;
Costs associated with any action(s) taken by the consumer to sort out the problem
such as:
- Costs of repairing or resolving the problem at consumers’ own expense, e.g. cost
of repairs;
- Costs of buying a replacement/substitute product or alternative service at own
expense;
- Cost of any telephone calls, postage or stationery incurred by the consumer to
seek redress for the unusable or non-delivered content;
- Travel costs;
- Legal costs;
- Costs of getting any other type of expert advice or assistance;
- Cost of any inconvenience such as lost earnings by consumer not being able to
work while taking time out to resolve the problem;
122 Europe Economics (2007), “An analysis of the issue of consumer detriment and the most appropriate methodologies to estimate it”.
71
Costs of any knock-on /consequential damages e.g. damage to the consumer’s
clothes or property from a faulty washing machine.
Net financial detriment or post-redress financial detriment represents gross (pre-redress)
detriment adjusted for any redress/ compensation received by consumers in the form of:
Replacement;
Substitute- an alternative product or service;
A full refund;
A partial refund;
Monetary compensation;
Compensation in the form of a credit note or in vouchers.
The post-redress stage, thus, takes account of all actions taken by the trader to solve the
problem (i.e. repairs, replacement goods or monetary redress provided by the trader to
the consumer).
A2.1.2 Non-financial detriment
Non-financial detriment refers to the “negative non-financial impacts which consumers
may experience including loss of time and psychological detriment” 123.
Time loss refers to the total amount of time a consumer has spent either as a direct
result of a problem or from trying to sort a problem out.
Psychological detriment arising from problems can relate to different emotions, such as
feelings of anger, frustration, stress or disappointment. Non-financial detriment can also
consist in adverse effects on health and other factors.
A2.2 Analysis of consumer detriment
This study utilises microdata from the ongoing Consumer Market Study to support the
Fitness Check of Consumer Law (lot 3)124 being conducted by GfK to analyse consumer
detriment resulting from purchases of faulty or defective goods.
While this study is an important source of evidence for the analysis/calculation of
consumer detriment, it is important to highlight the inherent limitations of a survey-
based approach to measuring consumer detriment, most notably:
A survey can only measure detriment that is known to and recalled by the
respondent:
It does not capture detriment that has yet to come to light (or may never come to
light) to the respondent (for example, any detriment from unauthorised use of
personal data by a provider of digital content, which may only become evident to
the consumer at a much later stage). As such, a survey-based approach measures
revealed or stated detriment but it does not measure unrevealed detriment.
The survey used in the study ongoing Consumer Market Study to support the
Fitness Check of Consumer Law (lot 3) is based entirely upon respondent recall of
particular problems during the last 12 months, the costs associated with these
problems, remedies received and the number of hours spent attempting to deal
with the problem(s).
A survey relies solely on respondent’s perceptions and views – just because a
consumer reports a problem with the quality of the product, does not necessarily
mean that the product was defective.
123 Ibidem. 124 Consumer market study to support the fitness check of the Consumer Law, European Commission, DG Justice and Consumers, forthcoming.
72
A2.2.1 Analysis of consumer detriment using microdata from the Consumer Market Study (Lot 3)
The bivariate regression was carried out in STATA. As such these calculations were
automated; not manual. The statistical formula is as follows: Yi= β0+ β1X1i + β2X2i + …
+ βkXk i+ εi.
Y is the explained / dependent variable.
X1, X2, …, Xk are explanatory / independent variables that help explain any change
in the explained variable, Y.
β0, β1, β2, …, βk are constants describing the functional relationship in the
population.
The value β0 is, in mathematical terms, the intercept. In the equation above, it
gives the value of Y when X1, X2, …, Xk, = 0.
The values β1, β2, …, βk identify the change along the Y scale expected for every
unit changed in fixed values of X1, X2, …, Xk
ε represents an error component. It relates to the portion of the dependent
variable, Y, that cannot be accounted for or explained by the independent
variables X1, X2, …, Xk.
i is used to denote each individual Member State125.
The table below shows how the various indicators of consumer detriment were calculated
using the microdata from the Consumer Market Study to Support the Fitness Check of
Consumer Law (lot 3)126.
Table A2.1 Overview of calculations for the microdata, by indicator of consumer
detriment and survey question
Indicators of consumer
detriment
Survey Questions
Incidence of problem
relating to defective goods
Q14 Over the past 12 months, how often have you
experienced problem(s) with defective goods? – those
selecting “Very often” and “often”.
Share of relevant
respondents receiving
redress
Q25 What was the eventual outcome of this problem?
– those selecting the following options:
4 (You received a refund / compensation for the
product)
5 (The product was replaced)
6 (The product was repaired free of charge) or
7 (The product was repaired at a discounted rate)
Net financial detriment =
Gross financial detriment
less the monetary value of
any remedies received
Gross consumer detriment = Q21c + (Q25c * Q25d)
Monetary value of any remedies received =
Q25 option 5 X Value (Q21c) +
Q25 option 6 X Value (Q21c) +
Q25 option 7 X Value (Q21c) +
Q25b
125 The consumer detriment analysis at Member State level did not yield sufficiently robust results due to limited sample sizes. 126 Consumer market study to support the fitness check of the Consumer Law, European Commission, DG Justice and Consumers, forthcoming.
73
Indicators of consumer
detriment
Survey Questions
Lower and upper bounds were calculated (i.e lower
bound assuming a range 1-5 =1; and upper bound
assuming 1-5=5).
Q21c Considering the most recent problem that you
experienced with a product that turned out to be
defective, what was the approximate value of this
product?
Q25b Which one of the following best reflects the
refund / compensation that you received? multiple
choice question, values ranging from Less than 5 euros
to 500 euros or more127, including options to select
“don’t know” or “The value is not yet confirmed/known”
Q25c What did you do?
1. You had the product repaired at your own expense
2. You bought a new product to replace the defective
one
3. You did nothing
Q25d What was the cost incurred in doing this? multiple
choice question, values ranging from Less than 5 euros
to 500 euros or more, including options to select “don’t
know” or “The value is not yet confirmed/known”.
The amount of time and
money spent by consumers
as a consequence of the
problem relating to defective
goods
NB: due to limited responses
and overlap with responses
to Q25c (options 1 and 2),
the answers to this question
were not taken into account
in the calculation of gross
financial detriment; instead
the responses were
separately analysed.
Q28 Thinking about your most recent problem, could you
please estimate the amount of money and time you
spent due to this problem on the following things?
(a) Administrative follow-up (e.g. cost of phone calls to
the trader, postage, etc.) .
(b) Legal follow-up (e.g. cost of legal advice, or any
other expert advice, etc.).
(c) Product follow-up (e.g. cost of resolving the problem
through repair or replacement at own cost).
A2.2.1.2 Results of bivariate regression analysis
Relationship between legal guarantee period and consumer detriment indicators:
127 On the basis of the assumption that 500+ = 500 for both lower and upper bounds.
74
Relationship between obligation on consumers to notify defect within a specific timeframe
and consumer detriment indicators
_cons 82.45937 18.25931 4.52 0.000 46.64994 118.2688
guarantee 5.957235 48.72829 0.12 0.903 -89.60674 101.5212
euroTOTALC~t Coef. Std. Err. t P>|t| [95% Conf. Interval]
Total 1.1304e+09 1,986 569168.876 Root MSE = 754.62
Adj R-squared = -0.0005
Residual 1.1304e+09 1,985 569451.324 R-squared = 0.0000
Model 8511.06055 1 8511.06055 Prob > F = 0.9027
F(1, 1985) = 0.01
Source SS df MS Number of obs = 1,987
. regress euroTOTALCost guarantee if channel=="FtF"
.
_cons 12.26184 .9901948 12.38 0.000 10.32024 14.20345
guarantee -7.769125 2.55077 -3.05 0.002 -12.77076 -2.767492
hTOTALCost Coef. Std. Err. t P>|t| [95% Conf. Interval]
Total 6241032.32 2,733 2283.58299 Root MSE = 47.715
Adj R-squared = 0.0030
Residual 6219911.78 2,732 2276.68806 R-squared = 0.0034
Model 21120.5448 1 21120.5448 Prob > F = 0.0023
F(1, 2732) = 9.28
Source SS df MS Number of obs = 2,734
. regress hTOTALCost guarantee if channel=="FtF"
.
_cons 6.769206 .9611932 7.04 0.000 4.884685 8.653727
guarantee 1.330961 2.387932 0.56 0.577 -3.350834 6.012756
costUPPER Coef. Std. Err. t P>|t| [95% Conf. Interval]
Total 10576787.2 3,696 2861.68484 Root MSE = 53.5
Adj R-squared = -0.0002
Residual 10575898 3,695 2862.21867 R-squared = 0.0001
Model 889.179514 1 889.179514 Prob > F = 0.5773
F(1, 3695) = 0.31
Source SS df MS Number of obs = 3,697
. regress costUPPER guarantee if channel=="FtF"
.
_cons 66.09088 3.085805 21.42 0.000 60.04079 72.14097
guarantee -3.66011 7.678295 -0.48 0.634 -18.71432 11.3941
NETdetri~PER Coef. Std. Err. t P>|t| [95% Conf. Interval]
Total 104692987 3,621 28912.7278 Root MSE = 170.06
Adj R-squared = -0.0002
Residual 104686416 3,620 28918.8995 R-squared = 0.0001
Model 6571.13622 1 6571.13622 Prob > F = 0.6336
F(1, 3620) = 0.23
Source SS df MS Number of obs = 3,622
. regress NETdetrimentUPPER guarantee if channel=="FtF"
.
_cons .7007747 .0081592 85.89 0.000 .6847778 .7167716
guarantee .0488079 .0202701 2.41 0.016 .0090662 .0885497
redress Coef. Std. Err. t P>|t| [95% Conf. Interval]
Total 763.251285 3,696 .206507382 Root MSE = .45414
Adj R-squared = 0.0013
Residual 762.055536 3,695 .206239658 R-squared = 0.0016
Model 1.19574843 1 1.19574843 Prob > F = 0.0161
F(1, 3695) = 5.80
Source SS df MS Number of obs = 3,697
. regress redress guarantee if channel=="FtF"
.
_cons .1823757 .0066548 27.41 0.000 .1693283 .1954231
guarantee -.1005727 .0165328 -6.08 0.000 -.132987 -.0681585
defectoften Coef. Std. Err. t P>|t| [95% Conf. Interval]
Total 512.026508 3,696 .138535311 Root MSE = .3704
Adj R-squared = 0.0096
Residual 506.949367 3,695 .137198746 R-squared = 0.0099
Model 5.07714057 1 5.07714057 Prob > F = 0.0000
F(1, 3695) = 37.01
Source SS df MS Number of obs = 3,697
. regress defectoften guarantee if channel=="FtF"
75
_cons 80.83335 19.70863 4.10 0.000 42.18158 119.4851
cons_ob 9.39148 38.48899 0.24 0.807 -66.09158 84.87454
euroTOTALC~t Coef. Std. Err. t P>|t| [95% Conf. Interval]
Total 1.1304e+09 1,986 569168.876 Root MSE = 754.61
Adj R-squared = -0.0005
Residual 1.1303e+09 1,985 569438.532 R-squared = 0.0000
Model 33903.295 1 33903.295 Prob > F = 0.8073
F(1, 1985) = 0.06
Source SS df MS Number of obs = 1,987
. regress euroTOTALCost cons_ob if channel=="FtF"
.
_cons 12.37562 1.067152 11.60 0.000 10.28312 14.46813
cons_ob -4.797756 2.062385 -2.33 0.020 -8.841748 -.7537628
hTOTALCost Coef. Std. Err. t P>|t| [95% Conf. Interval]
Total 6241032.32 2,733 2283.58299 Root MSE = 47.748
Adj R-squared = 0.0016
Residual 6228694.09 2,732 2279.90267 R-squared = 0.0020
Model 12338.2303 1 12338.2303 Prob > F = 0.0201
F(1, 2732) = 5.41
Source SS df MS Number of obs = 2,734
. regress hTOTALCost cons_ob if channel=="FtF"
.
_cons 6.930649 1.033094 6.71 0.000 4.905159 8.956139
cons_ob .19743 1.971657 0.10 0.920 -3.668213 4.063073
costUPPER Coef. Std. Err. t P>|t| [95% Conf. Interval]
Total 10576787.2 3,696 2861.68484 Root MSE = 53.502
Adj R-squared = -0.0003
Residual 10576758.5 3,695 2862.45154 R-squared = 0.0000
Model 28.7013196 1 28.7013196 Prob > F = 0.9202
F(1, 3695) = 0.01
Source SS df MS Number of obs = 3,697
. regress costUPPER cons_ob if channel=="FtF"
.
_cons 70.4003 3.316891 21.22 0.000 63.89714 76.90347
cons_ob -17.76767 6.315716 -2.81 0.005 -30.15039 -5.384956
NETdetri~PER Coef. Std. Err. t P>|t| [95% Conf. Interval]
Total 104692987 3,621 28912.7278 Root MSE = 169.88
Adj R-squared = 0.0019
Residual 104464598 3,620 28857.6237 R-squared = 0.0022
Model 228389.644 1 228389.644 Prob > F = 0.0049
F(1, 3620) = 7.91
Source SS df MS Number of obs = 3,622
. regress NETdetrimentUPPER cons_ob if channel=="FtF"
.
_cons .6927666 .0087618 79.07 0.000 .6755882 .709945
cons_ob .0579723 .0167218 3.47 0.001 .0251874 .0907572
redress Coef. Std. Err. t P>|t| [95% Conf. Interval]
Total 763.251285 3,696 .206507382 Root MSE = .45375
Adj R-squared = 0.0030
Residual 760.776618 3,695 .205893537 R-squared = 0.0032
Model 2.47466713 1 2.47466713 Prob > F = 0.0005
F(1, 3695) = 12.02
Source SS df MS Number of obs = 3,697
. regress redress cons_ob if channel=="FtF"
.
_cons .1662938 .007188 23.13 0.000 .1522009 .1803867
cons_ob -.0007766 .0137183 -0.06 0.955 -.0276728 .0261197
defectoften Coef. Std. Err. t P>|t| [95% Conf. Interval]
Total 512.026508 3,696 .138535311 Root MSE = .37225
Adj R-squared = -0.0003
Residual 512.026064 3,695 .138572683 R-squared = 0.0000
Model .000444054 1 .000444054 Prob > F = 0.9549
F(1, 3695) = 0.00
Source SS df MS Number of obs = 3,697
. regress defectoften cons_ob if channel=="FtF"
76
Relationship between time period for reversal of burden of proof and consumer detriment
indicators _cons 88.92609 18.2242 4.88 0.000 53.18551 124.6667
reversal -40.97913 49.16614 -0.83 0.405 -137.4018 55.44353
euroTOTALC~t Coef. Std. Err. t P>|t| [95% Conf. Interval]
Total 1.1304e+09 1,986 569168.876 Root MSE = 754.49
Adj R-squared = -0.0002
Residual 1.1300e+09 1,985 569256.388 R-squared = 0.0003
Model 395458.691 1 395458.691 Prob > F = 0.4047
F(1, 1985) = 0.69
Source SS df MS Number of obs = 1,987
. regress euroTOTALCost reversal if channel=="FtF"
.
_cons 11.23422 .9871823 11.38 0.000 9.298516 13.16991
reversal -1.003446 2.613752 -0.38 0.701 -6.128575 4.121684
hTOTALCost Coef. Std. Err. t P>|t| [95% Conf. Interval]
Total 6241032.32 2,733 2283.58299 Root MSE = 47.794
Adj R-squared = -0.0003
Residual 6240695.65 2,732 2284.29562 R-squared = 0.0001
Model 336.675514 1 336.675514 Prob > F = 0.7011
F(1, 2732) = 0.15
Source SS df MS Number of obs = 2,734
. regress hTOTALCost reversal if channel=="FtF"
.
_cons 7.036874 .9498027 7.41 0.000 5.174685 8.899063
reversal -.3670263 2.522856 -0.15 0.884 -5.313353 4.579301
costUPPER Coef. Std. Err. t P>|t| [95% Conf. Interval]
Total 10576787.2 3,696 2861.68484 Root MSE = 53.502
Adj R-squared = -0.0003
Residual 10576726.6 3,695 2862.44291 R-squared = 0.0000
Model 60.5823703 1 60.5823703 Prob > F = 0.8843
F(1, 3695) = 0.02
Source SS df MS Number of obs = 3,697
. regress costUPPER reversal if channel=="FtF"
.
_cons 67.6788 3.050913 22.18 0.000 61.69712 73.66048
reversal -15.23672 8.067503 -1.89 0.059 -31.05402 .5805873
NETdetri~PER Coef. Std. Err. t P>|t| [95% Conf. Interval]
Total 104692987 3,621 28912.7278 Root MSE = 169.98
Adj R-squared = 0.0007
Residual 104589929 3,620 28892.2454 R-squared = 0.0010
Model 103058.972 1 103058.972 Prob > F = 0.0590
F(1, 3620) = 3.57
Source SS df MS Number of obs = 3,622
. regress NETdetrimentUPPER reversal if channel=="FtF"
.
_cons .6980775 .0080552 86.66 0.000 .6822845 .7138705
reversal .0748232 .021396 3.50 0.000 .0328741 .1167724
redress Coef. Std. Err. t P>|t| [95% Conf. Interval]
Total 763.251285 3,696 .206507382 Root MSE = .45374
Adj R-squared = 0.0030
Residual 760.733464 3,695 .205881858 R-squared = 0.0033
Model 2.51782106 1 2.51782106 Prob > F = 0.0005
F(1, 3695) = 12.23
Source SS df MS Number of obs = 3,697
. regress redress reversal if channel=="FtF"
.
_cons .1547431 .0065899 23.48 0.000 .1418229 .1676634
reversal .0799897 .0175041 4.57 0.000 .0456711 .1143083
defectoften Coef. Std. Err. t P>|t| [95% Conf. Interval]
Total 512.026508 3,696 .138535311 Root MSE = .37121
Adj R-squared = 0.0054
Residual 509.148978 3,695 .13779404 R-squared = 0.0056
Model 2.87752972 1 2.87752972 Prob > F = 0.0000
F(1, 3695) = 20.88
Source SS df MS Number of obs = 3,697
. regress defectoften reversal if channel=="FtF"
77
Relationship between approach to remedies and consumer detriment indicators
_cons 68.08726 20.18732 3.37 0.001 28.4967 107.6778
remedies 51.13276 37.01551 1.38 0.167 -21.46058 123.7261
euroTOTALC~t Coef. Std. Err. t P>|t| [95% Conf. Interval]
Total 1.1304e+09 1,986 569168.876 Root MSE = 754.26
Adj R-squared = 0.0005
Residual 1.1293e+09 1,985 568908.705 R-squared = 0.0010
Model 1085609.02 1 1085609.02 Prob > F = 0.1673
F(1, 1985) = 1.91
Source SS df MS Number of obs = 1,987
. regress euroTOTALCost remedies if channel=="FtF"
.
_cons 10.71625 1.078683 9.93 0.000 8.601134 12.83137
remedies 1.329145 2.031261 0.65 0.513 -2.653818 5.312108
hTOTALCost Coef. Std. Err. t P>|t| [95% Conf. Interval]
Total 6241032.32 2,733 2283.58299 Root MSE = 47.792
Adj R-squared = -0.0002
Residual 6240054.36 2,732 2284.06089 R-squared = 0.0002
Model 977.959479 1 977.959479 Prob > F = 0.5129
F(1, 2732) = 0.43
Source SS df MS Number of obs = 2,734
. regress hTOTALCost remedies if channel=="FtF"
.
_cons 7.934993 1.030739 7.70 0.000 5.91412 9.955865
remedies -3.495192 1.976925 -1.77 0.077 -7.371163 .38078
costUPPER Coef. Std. Err. t P>|t| [95% Conf. Interval]
Total 10576787.2 3,696 2861.68484 Root MSE = 53.479
Adj R-squared = 0.0006
Residual 10567847.2 3,695 2860.03985 R-squared = 0.0008
Model 8939.92008 1 8939.92008 Prob > F = 0.0771
F(1, 3695) = 3.13
Source SS df MS Number of obs = 3,697
. regress costUPPER remedies if channel=="FtF"
.
_cons 69.19167 3.307707 20.92 0.000 62.70651 75.67682
remedies -13.61733 6.352513 -2.14 0.032 -26.07219 -1.162468
NETdetri~PER Coef. Std. Err. t P>|t| [95% Conf. Interval]
Total 104692987 3,621 28912.7278 Root MSE = 169.95
Adj R-squared = 0.0010
Residual 104560263 3,620 28884.0506 R-squared = 0.0013
Model 132724.41 1 132724.41 Prob > F = 0.0321
F(1, 3620) = 4.60
Source SS df MS Number of obs = 3,622
. regress NETdetrimentUPPER remedies if channel=="FtF"
.
_cons .7069094 .0087595 80.70 0.000 .6897354 .7240833
remedies .0065235 .0168005 0.39 0.698 -.0264157 .0394626
redress Coef. Std. Err. t P>|t| [95% Conf. Interval]
Total 763.251285 3,696 .206507382 Root MSE = .45448
Adj R-squared = -0.0002
Residual 763.220143 3,695 .206554842 R-squared = 0.0000
Model .031142225 1 .031142225 Prob > F = 0.6978
F(1, 3695) = 0.15
Source SS df MS Number of obs = 3,697
. regress redress remedies if channel=="FtF"
.
_cons .1571322 .0071691 21.92 0.000 .1430765 .171188
remedies .0329175 .0137501 2.39 0.017 .0059589 .0598761
defectoften Coef. Std. Err. t P>|t| [95% Conf. Interval]
Total 512.026508 3,696 .138535311 Root MSE = .37197
Adj R-squared = 0.0013
Residual 511.233558 3,695 .138358203 R-squared = 0.0015
Model .792949546 1 .792949546 Prob > F = 0.0167
F(1, 3695) = 5.73
Source SS df MS Number of obs = 3,697
. regress defectoften remedies if channel=="FtF"
78
Annex 3 Business interviews analysis
The Annex represents the findings of the analysis of the interviews of 375 micro, small
and medium-sized retailers in the 15 selected Member States. The results are presented
by question, examining where relevant and possible its results both by Member State and
by response demographics (whether or not the retailer sells-cross border, size, and retail
channel).
A full overview of responses in tabular format for the various questions is provided in
Annex 5.
Approach for recruiting businesses
The approach to the selection of retailers consisted of identifying companies active in the
retail trade and e-commerce and trading both domestically and cross-border. In targeting
sample leads, the study looked at sourcing these from one of a number of widely defined
sources, mostly on a country-by-country basis. The sample of micro, small and medium-
sized enterprises was ordered from Dun and Bradstreet. For each country, a random
sample of enterprises was selected from the total number of enterprises in the database
that reported activities in the relevant SIC codes. Enterprises in the Dun and Bradstreet
databases are categorised according to their business activity, following the standard
industrial classification (SIC) of economic activities.
Beyond the size of the company, the most important criterion used to select the sample
were the types of goods the companies are selling. In line with categories used
elsewhere, these sectors are:
Clothing, footwear and accessories
Beauty, health and wellness
Entertainment - books, magazines, Vinyl, CDs/ DVDs (movies, music, games)
Sports and outdoors
Toys
Electronic/ digital goods (cameras, laptops, gaming consoles, mobile phones,
tablets etc.)
Small household appliances (e.g. toasters, kettles, etc.)
Large household appliances (e.g. dish washers, washing machines, etc.)
Furniture, furnishings and decoration (including do-it-yourself goods and
maintenance products)
Cars, motorbikes, bikes or parts
Other products, please specify:___________
Companies were pre-recruited by telephone before taking part in the interviews. Pre-
recruitment provided for better control over the sample (to help ensure a good
distribution by various retailer profiles) and provided a better response rate128 and lower
refusal rate129. The questionnaire was translated into the relevant languages of the 15
Member States selected. The interviews were carried out June and July 2016.
In terms of quality control, measures applied are highlighted in Table A3.1.
Table A3.1 Control measures applied
Step Control measure
International ESOMAR member
128 The response rate varied between 4% and 20% (depending in country), as is common with business interviews. 129 Refusal rates varied between 17% and 55%, as is common with business interviews. .
79
Step Control measure
CATI centre
(located in the
Netherlands)
Considerable experience of large-scale telephone (CATI) surveys across Europe
Considerable experience of business surveys
Capacity to deliver large-scale telephone surveys (CATI infrastructure and number of interviewers)
Established working relationship with Ipsos
Fieldforce Use of experienced telephone interviewers only
Interviews conducted by native speakers
Thorough briefing of interviewers in addition to detailed interviewer instructions
Sampling Clear definition of the target audience for the purpose of screening
Effective screening to identify the most appropriate respondent
Close monitoring of quotas to ensure sample composition
Questionnaires Rigorous translation process to national languages
Provision of a glossary of technical terminologies/descriptions
Data collection Control of fieldwork progress (e.g. timing, structure of sample, response rate)
Briefing of project coordinator, interviewers and translation staff
Close supervision of interviewers by an experienced project coordinator
Interviewers’ activities monitored during the data collection process through listen-ins
Data-
processing
CATI script through Dimensions for all countries
Logic/routing checks incorporated into the CATI scripts
Standard code-book for data processing
Strict rules for editing of questionnaires
Checking data files, including open-ended responses
Final data control on aggregate data file
In addition to the above, retailers were filtered through a number of screening questions
added to the questionnaire (see Annex 4: ‘Screening questions’). These questions
ensured that the company sells directly to consumers, sells non-food products (rather
than food products or services), the interviewee is the appropriate contact for
participating in the Study and had decision-making responsibility within the company.
80
Overview of responses
A total of 375 responses were collected from retailers located in fifteen EU countries.
Figure 14. Number of respondents by Member State and company size (number of
employees)
Note: response base is 375.
The high majority of respondents deal with face-to-face sale (59%), and given the nature
of this type of business it is not surprising that only a minority of them sell cross-border.
Although less represented, up to half of retailers selling only through distance sale
channels sell cross-border.
Figure 15 shows the share of respondents by sector, highlighting that retailers from a
variety of products (‘Other’), cars, clothing and furniture were most represented in this
survey.
Figure 15. Share of respondents by sector
Note: response base is 375.
81
Table A3.2 Number of respondents by sector
Sector Respondents
Cars, motorbikes, bikes or parts 87
Clothing, footwear and accessories 80
Furniture, furnishings and decoration (including do-it-
yourself goods and maintenance products)
60
Beauty, health and wellness 44
Electronic/ digital goods (cameras, laptops, gaming
consoles, mobile phones, tablets etc.)
36
Sports and outdoors 29
Entertainment - books, magazines, Vinyl, CDs/ DVDs
(movies, music, games)
28
Small household appliances (e.g. toasters, kettles, etc.) 24
Toys 21
Other products 21
Large household appliances (e.g. dish washers, washing
machines, etc.)
19
Total 375
In the category ‘Other products’ the following products were identified by respondents:
Table A3.3 Further details on ‘Other’ products, by Member State
Austria None under ‘Other’
Bulgaria Not specified
Finland Pet products/ accessories
France Pet products/ accessories
Germany Stationary
Greece None under ‘Other’
Hungary Pet products/ accessories
Luxembourg Fishing equipment
Netherlands Gift products
Poland Not specified
Portugal Various small articles
Romania Seeds, Fertilizers, Pesticides
Spain Knives, pocket knives, precision weapons and firearms
Sweden Not specified
UK Plastic bags
Note: total doesn’t add up to 21 as not all respondents provided further details.
82
Figure 16. Share of respondents by sales channel and target market
Base: 371130, ‘Only face-to-face’: 222 (‘Cross-border sales’: 35, ‘Only national sales’:
187), Only distance sales: 20 (Cross-border sales: 10, ‘Only national sales’: 10), ‘Both’:
129 (Cross-border sales: 50, Only national sales: 79).
Table A3.4 Overview of respondents by Member State and sales channel
Sale
s
chan
nel
Count All AT BG FI FR DE EL HU LU NL PL PT RO ES SE UK
Only face-to-
face
Number
of
responde
nts
22
2
22 23 11 12 14 17 14 10 9 17 23 14 18 13 5
Share 60
%
81
%
74
%
41
%
57
%
56
%
65
%
54
%
63
%
38
%
63
%
74
%
50
%
69
%
52
%
45
%
Only
dista
nce
sales
Number
of
responde
nts
20 0 0 1 1 3 0 3 1 2 2 0 2 0 4 1
Share 5
%
% % 4
%
5
%
12
%
% 12
%
6
%
8
%
7
%
% 7
%
% 16
%
9
%
Both Number
of
responde
nts
12
9
5 8 15 8 8 9 9 5 13 8 8 12 8 8 5
Share 35
%
19
%
26
%
56
%
38
%
32
%
35
%
35
%
31
%
54
%
30
%
26
%
43
%
31
%
32
%
45
%
130 Four respondents only selected “other” sales channels, and based on the response that they provided, it was not possible to classify these channels as either “distance” or “face-to-face”.
83
Total Number
of
responde
nts
37
1
27 31 27 21 25 26 26 16 24 27 31 28 26 25 11
For the purposes of this study, the company size is defined by the number of employees.
In terms of number of employees, about half of respondents are micro companies
between 0 and 9 employees (49%, n=181), followed by small companies - 10-49
employees – (41%, n=152). Only 10% are companies that with between 50 and 250
employees (n=38).
While the size of the company does not necessarily explain the extent of cross-border
activity (between 25% and 29% for each category), this is different for the type of
business model. Smaller companies are more likely to only conduct face-to-face sales,
while the bigger the company the more it will be oriented toward a multichannel business
model.
Figure 17. Share of respondents by business model and company size
Base: ‘all respondents’: 371131, ‘0-9 employees’: 181 (‘Only face-to-face’: 121, ‘Only
distance sales’ 17), ‘10-49 employees’: 152 (‘Only face-to-face’: 84, ‘Only distance
sales’: 3), ’50-250 employees: 38’ (‘Only face-to-face’: 17, ‘Only distance sales’: 0).
Legal guarantee
Q1. Can you tell me the legal (statutory) guarantee period for sellers and
retailers in your country?
Question asked to all respondents in 15 Member States. Response base= 375
Member States going beyond Directive 1999/44/EC by having a longer legal
guarantee:
Finland (unlimited)
Ireland (4 years)
Netherlands (unlimited)
Sweden (3 years)
United Kingdom (6 years in England and Wales, 5 years in Scotland)
131 Four respondents only selected “other” sales channels, and based on the response that they provided, it was not possible to classify these channels as either “distance” or “face-to-face”.
84
About half of interviewees (47%, n=153), excluding FI and NL132, knew the correct legal
(statutory) guarantee period established in his/her country. Spanish interviewees proved
to be the most knowledgeable, while the majority of UK respondents were not aware of
the longer legal guarantee period (six years) in force in UK. Respondents from the
Netherlands and Finland also did not seem aware of there being no fixed legal guarantee
period in their country. Respondents from Sweden fared slightly better, though only over
a quarter was aware of the legal guarantee period being three years.
Micro companies (0 – 9 employees) seems to be less aware of the 2-year legal guarantee
period compared with bigger companies (39% vs 54%).
Figure 18. Correct answers to the question: Can you tell me the legal (statutory)
guarantee period for sellers and retailers in your country?
Base: 375, Austria 28, Bulgaria 31, Finland 27 France 21, Germany 25, Greece 26,
Hungary 26, Luxembourg 17, Netherlands 25, Poland 28, Portugal 31, Romania 28 Spain
26, Sweden 25, United Kingdom 11
132 In Finland and the Netherlands there is no a fixed legal guarantee period and depends on the types of product type, as such the responses from companies in or selling from these two Member States were discounted. N=323.
85
Table A3.5 Answers to the question: Can you tell me the legal (statutory) guarantee period for sellers and retailers in your country?
All AT BG FI FR DE EL HU LU NL PL PT RO ES SE UK
Legal
guarantee
period: 6
months
Count 61 2 8 7 2 4 6 9 2 3 1 2 3 2 7 3
% of
Cases
16% 7% 26% 26% 10% 16% 23% 35% 12% 12% 4% 6% 11% 8% 28% 27%
Legal
guarantee
period: 1
year
Count 96 2 11 8 7 3 7 16 3 3 6 5 12 3 8 2
% of
Cases
26% 7% 35% 30% 33% 12% 27% 62% 18% 12% 21% 16% 43% 12% 32% 18%
Legal
guarantee
period: 2
years
Count 174 12 12 13 4 17 6 3 8 7 21 21 20 21 7 2
% of
Cases
46% 43% 39% 48% 19% 68% 23% 12% 47% 28% 75% 68% 71% 81% 28% 18%
Legal
guarantee
period: 3
years
Count 33 5 5 2 0 3 0 1 0 2 1 0 3 2 7 2
% of
Cases
9% 18% 16% 7% 0% 12% 0% 4% 0% 8% 4% 0% 11% 8% 28% 18%
Legal
guarantee
period: 5
years or 6
years
Count 22 0 5 1 1 2 2 0 0 1 0 2 1 2 4 1
% of
Cases
6% 0% 16% 4% 5% 8% 8% 0% 0% 4% 0% 6% 4% 8% 16% 9%
Legal
guarantee
period:
There is no
such time
period
Count 34 4 2 6 5 2 2 2 4 3 1 1 0 0 0 2
% of
Cases
9% 14% 6% 22% 24% 8% 8% 8% 24% 12% 4% 3% 0% 0% 0% 18%
Legal
guarantee
period:
Count 49 3 2 1 2 0 6 0 1 10 1 4 6 2 6 5
% of 13% 11% 6% 4% 10% 0% 23% 0% 6% 40% 4% 13% 21% 8% 24% 45%
86
[INT: Do
not read
out] Don’t
know
Cases
Total Count 375 28 31 27 21 25 26 26 17 25 28 31 28 26 25 11
87
Note: correct answer highlighted in bold.
Q2. And what is the legal guarantee period for sellers in the foreign countries
where you sell your products? (Does your company sell products to consumers in
more than one EU-country through face-to-face channels (through subsidiaries, branches
and retail outlets in other countries or doorstep selling), or distance sales channels (e-
commerce, telephone sales, mail order/ catalogue sales via post)
Question asked to respondents selling cross-border in more than one EU-country.
Response base= 151
More than half of the interviewees (58%, n=87)133 stated to not be aware of the legal
guarantee period in the other EU countries where they sell their goods. Only a fifth of the
respondents (n=28) was aware of the correct legal guarantee period in force in other EU
countries.
Q3. In case a consumer is not satisfied with a repair or replacement of faulty
goods during the legal guarantee period, what action does your company
normally take?
Question asked to all respondents in 15 Member States. Response base= 375
In case a consumer is not satisfied with a repair /replacement of faulty goods during the
legal guarantee period, the majority of retailers interviewed propose a second additional
attempt to repair or replace the good. The second most likely course of action is the offer
of a full refund to the unsatisfied customer.
Figure 19. Answer to question: In case a consumer is not satisfied with a repair
/replacement of faulty goods during the legal guarantee period, what action
does your company normally take? (multiple answers possible)
Base: Total 375, ‘We insist on one additional attempt to repair or replace the good (even
if that may take some time)’: 212, ‘We insist on more than one additional attempt to
repair or replace the good (even if that may take some time)’: 127, ‘We offer a full
refund’: 155, ‘We offer a partial refund or a price reduction (i.e. less than the original
sale price of the product)’: 71, ‘We offer compensation in credit note or in vouchers’: 70,
‘Other, please specify’: 49, ‘Don’t know’: 9.
The size of the company seems to affect how complaints are dealt with. Indeed, while
companies up to 49 employees tend to favour repairing or replacing the faulty good (an
option indicated by 59% of interviewees in both categories, n=198), this approach is
133 N=151
88
used only by 5 medium-sized companies (37%, n=14) that on the contrary tend to opt
for offering a full refund (14, i.e. about 60% out of23).
The offer of a full refund is also more common in case of retailers that operate only
distance sales than retailers using face-to-face sales or both (respectively 7 respondents
(60%, (n=12), against 59 respondents (41%, n=143).
Table A3.6 Answer to question: In case a consumer is not satisfied with a repair
/replacement of faulty goods during the legal guarantee period, what action
does your company normally take?
Action Sales channel Cross-border
sales
Size
(Employees)
All
countr
ies
Only
face-
to-
face
Only
distan
ce
sales Both Yes No
0-9
emplo
yees
10-49
emplo
yees
50-
250
emplo
yees
We insist on one
additional attempt
to repair or replace
the good (even if
that may take some
time)
57% 56% 65% 57% 52% 58% 59% 58% 37%
We insist on more
than one additional
attempt to repair or
replace the good
(even if that may
take some time)
34% 33% 45% 33% 32% 35% 28% 38% 47%
We offer a full
refund
41% 41% 60% 41% 39% 42% 40% 38% 61%
We offer a partial
refund or a price
reduction (i.e. less
than the original
sale price of the
product)
19% 15% 30% 24% 17% 19% 15% 20% 34%
We offer
compensation in
credit note or in
vouchers
19% 19% 15% 19% 19% 18% 18% 18% 24%
Other, please
specify
13% 15% 0% 12% 13% 13% 14% 12% 13%
Don’t know 2% 3% 0% 2% 3% 2% 3% 2% 0%
Response base 375 222 20 129 98 277 184 153 38
Due to the sample size inferences should be done with caution. Table A3.5 shows that
offering a full refund is considered as a remedy in the UK (73%), Romania (71%),
Sweden (60%) and Bulgaria (55%), while an additional attempt to repair or replace is
common in Romania (86%) and Spain (77%). Compensation in the form of credit notes
is common in Luxembourg (47%), but not at all in Bulgaria.
89
Table A3.7 Answer to question: In case a consumer is not satisfied with a repair
/replacement of faulty goods during the legal guarantee period, what action
does your company normally take?
Remedy All AT B
G
FI FR DE EL H
U
LU NL PL PT R
O
ES SE U
K
We insist on more
than one additional
attempt to repair or
replace the good
(even if that may
take some time)
57
%
29
%
68
%
56
%
62
%
56
%
62
%
38
%
65
%
48
%
32
%
71
%
86
%
77
%
56
%
27
%
We insist on one
additional attempt
to repair or replace
the good (even if
that may take some
time)
34
%
39
%
23
%
56
%
24
%
36
%
50
%
27
%
29
%
32
%
36
%
0
%
18
%
69
%
44
%
27
%
We offer a full
refund
41
%
29
%
55
%
37
%
19
%
44
%
31
%
31
%
29
%
44
%
39
%
29
%
71
%
38
%
60
%
73
%
We offer a partial
refund or a price
reduction (i.e. less
than the original
sale price of the
product)
19
%
4
%
6
%
30
%
10
%
16
%
19
%
8
%
18
%
36
%
18
%
0
%
18
%
31
%
52
%
36
%
We offer
compensation in
credit note or in
vouchers
19
%
29
%
0
%
11
%
14
%
32
%
19
%
4
%
47
%
32
%
11
%
6
%
7
%
27
%
36
%
27
%
Response base 37
5
28 31 27 21 25 26 26 17 25 28 31 28 26 25 11
Q4a. Approximately what share of consumers who complain that a good is
faulty directly ask for a full refund?
Question asked to all respondents in 15 Member States. Response base= 354
Across all countries, according to businesses the mean reported share of customers
asking for a full refund was 11%. However, results varied widely across countries with
higher figures in Germany (24%) and Romania (23%) and lower figures in France
(<1%), Poland (4%), Portugal (4%), UK (5%) and Greece (5%). Answers also varied
within countries with responses ranging from 0% to 100% in all countries except for
Sweden (where the range was only slightly smaller at 0-95%) and the five countries with
the lowest mean reported share of customers who complain directly and ask for a full
refund (which showed smaller ranges), shown in Table A3.8.
90
Figure 20. Overview of the responses to the question: Approximately what share of
consumers who complain that a good is faulty directly ask for a full refund?
Base: n= All countries 354, Austria 27, Bulgaria 29, Finland 26, France 21, Germany 25,
Greece 26, Hungary 24, Luxembourg 16,Netherlands 21, Poland 27,Portugal 29,
Romania 26, Spain 25,Sweden 23, UK 9. Non-response: 21
Table A3.8 Overview of the responses to the question: Approximately what share of
consumers who complain that a good is faulty directly ask for a full refund?
Results by sales channel, cross-border sales and company size, presented in Table A3.9,
show slightly higher reported shares of consumers who complain and ask for a full refund
among medium-sized enterprises. Retailers only selling domestically also report a higher
share of consumers that ask for a full refund.
Table A3.9 Reported share of consumers who complain that a good is faulty directly
asking for a full refund, by sales channel, cross-border sales and company
size
Respon
se type
All
countri
es
Sales channel Cross-border
sales
Size (Employees)
Only
face-
to-face
Only
distanc
e sales
Both Yes No 0-9
employ
ees
10-49
employ
ees
50-250
employ
ees
Mean
(in %)
11 12 12 10 6 13 9 14 13
All AT BG FI FR DE EL HU LU NL PL PT RO ES SE UK
Mean 11 13 19 10 24 5 12 7 12 4 4 23 8 12 5
Median 1 1 1 1 3 1 1 1 1 3 3 3 1
Maximum 100 100 100 100 2 100 50 100 100 100 30 50 100 50 95 30
Total
response
base
354 27 29 26 21 25 26 24 16 21 27 29 26 25 23 9
Missing 21 1 2 1 2 1 4 1 2 2 1 2 2
91
Total
respon
se base
354 210 18 123 95 259 176 145 33
Q4b. Approximately what share of consumers exercise their right to reject a
defective good within 30 days of delivery?
Question asked to respondents selling in the United Kingdom. Response base= 21
This question was only asked to respondents from or selling in the United Kingdom for
being the only country in the sample with such a right to reject a defective good within a
certain timeframe.
Approximately 10% of consumers are reported to exercise their right to reject a defective
good within 30 days. This question was only asked of some retailers so the sample size is
too small to analyse by country.
Figure 21. Overview of the responses to the question: Approximately what share of
consumers exercise their right to reject a defective good within 30 days of
delivery?
Table A3.10 Reported share of consumers who complain that a good is faulty exercise
their right to reject a defective good within 30 days of delivery
Respon
se type
All
countri
es
Sales channel Cross-border
sales
Size (Employees)
Only
face-
to-face
Only
distanc
e sales
Both Yes No 0-9
employ
ees
10-49
employ
ees
50-250
employ
ees
Mean
(in %)
10 16 1 9 8 14 13 13 2
Total
respon
se base
24 7 3 14 16 8 8 10 6
Q5a. Are there any differences in the remedies offered by your company for
faulty products for distance sales (e-commerce, mail order etc.) as opposed to
face-to-face sales (bricks and mortar shops and doorstep selling)?
Question asked to respondents selling via: Bricks & mortar stores, i.e. physical shops;
Doorstep-selling (including promotional/sales events at private homes, work places or
All AT BG FI FR DE EL HU LU NL PL PT RO ES SE UK
Mean 10 1 1 1 10 2 2 2 1 22
Median 1 1 1 1 10 2 2 1 1
Minimum 1 1 1 10 2 1 1
Maximum 100 1 1 1 10 2 5 2 1 100
Total response base
24 1 1 2 1 1 1 3 2 2 10
Missing 3 1 1 1
92
during excursions); E- commerce, including mobile-commerce; Telephone sales; Mail
order/ catalogue sales via post
Response base= 127
The large majority of respondents (82%) reported that there was no difference in the
remedies offered by their company for faulty products in distances sales compared to
face-to-face sales. This was generally consistent across countries, with at least 75% of
respondents saying they treated the customer in the same way except in the Netherlands
and Austria where 31%* and 20% respectively said they offered different remedies
based on the way the sale had taken place.*Netherlands n=13, Austria n=5.
Table A3.11 Answers to the question: Are there any differences in the remedies offered
by your company for faulty products for distance sales (e-commerce, mail
order etc.) as opposed to face-to-face sales (bricks and mortar shops and
doorstep selling)?
Answer
All countries
Sales
channel Cross-border Company size
Both Yes No 0-9 employees
10-49 employees
50-250 employees
Yes 13% 13% 12% 13% 14% 14% 5%
No 82% 82% 84% 81% 84% 80% 85%
Don’t know 6% 6% 4% 6% 2% 6% 10%
Total 127 127 49 78 43 64 20
Table A3.12 Answer to the question: Are there any differences in the remedies offered by
your company for faulty products for distance sales as opposed to face-to-
face sales?
All AT BG FI FR DE EL HU LU NL PL PT RO ES SE UK
Yes Number of
responses
16 1 0 2 1 1 1 2 0 4 1 1 1 0 0 1
Share 13
%
20
%
0
%
13
%
14
%
14
%
11
%
22
%
0
%
31
%
13
%
13
%
8
%
0
%
0
%
20
%
No Number of
responses
10
4
3 8 13 6 6 7 7 5 8 7 7 10 6 7 4
Share 82
%
60
%
10
0
%
87
%
86
%
86
%
78
%
78
%
10
0
%
62
%
88
%
88
%
83
%
75
%
88
%
80
%
Don’t
know
Number of
responses
7 1 0 0 0 0 1 0 0 1 0 0 1 2 1 0
Share 6
%
20
%
0
%
0
%
0
%
0
%
11
%
0
%
0
%
8
%
0
%
0
%
8
%
25
%
13
%
0
%
Respon
se base
Number of
responses
12
7
5 8 15 7 7 9 9 5 13 8 8 12 8 8 5
Q5b. Please explain why there are differences in the remedies offered by your
company for faulty products for distance sales as opposed to face-to-face sales
Question asked to respondents answering affirmatively to question 5a?. Response base=
16
93
The sixteen respondents that reported a difference in the remedies offered for faulty
products for distance sales as opposed to face-to-face sales were asked to explain the
reason behind such difference.
Six respondents (Greece, France, United Kingdom, Finland, Germany, Hungary)
highlighted that face to face sales are easier and more flexible in terms of possible
remedies. Customers can return the faulty product, but also exchange it with
something else available in the shop. The whole procedure is easier and faster;
Fuve respondents (two from Hungary, one from Austria, Netherlands, United
Kingdom), stated that differences in the applicable legal rules to on-line and face
to face makes some remedies better suited for either one or the other;
Costs for collection and shipment were mentioned by 2 respondents, from Portugal
and Romania.
Q6. Do you require consumers to prove that the defect (including a lack of
quality or performance feature) existed at the time of delivery before offering
them a remedy?
Question asked to all respondents. Response base= 375
For the most part, respondents reported that they either always ask for proof that the
defect existed at the time of delivery before offering a remedy, or they do not ask for
proof that the defect existed at the time of delivery. There were few respondents for
whom this was based upon a time constraint or relationship with the customer. This data
is consistent among countries and typology of respondents.
Table A3.13 Overview of the extent to which sellers require consumers to prove that the
defect (including a lack of quality or performance feature) existed at the time
of delivery before offering them a remedy?
Yes,
alway
s
Yes,
but
only
after
six
mont
hs
from
the
delive
ry
Yes,
but
only
after
one
year
from
the
delive
ry
Yes,
but
only
after
2
years
from
the
delive
ry
No, not
if they
are
loyal/k
nown
custom
ers
No,
we
usuall
y do
not
ask
for
this
proof
Other,
pleas
e
specif
y
Don't
know
Base
size
All countries 31% 8% 1% 0% 5% 46% 6% 2% 375
Austria 21% 11% 0% 0% 7% 57% 4% 0% 28
Bulgaria 48% 0% 0% 0% 10% 32% 6% 3% 31
Finland 30% 4% 0% 0% 4% 44% 7% 11% 27
France 33% 10% 0% 0% 5% 43% 10% 0% 21
Germany 24% 16% 4% 0% 8% 48% 0% 0% 25
Greece 42% 4% 0% 0% 4% 46% 4% 0% 26
Hungary 23% 12% 4% 0% 0% 54% 8% 0% 26
Luxembour
g
6% 6% 0% 0% 12% 71% 6% 0% 17
Netherlands 36% 0% 0% 0% 4% 44% 12% 4% 25
Poland 25% 0% 0% 0% 4% 46% 25% 0% 28
94
Portugal 32% 6% 0% 3% 13% 45% 0% 0% 31
Romania 46% 0% 4% 0% 0% 43% 4% 4% 28
Spain 15% 42% 4% 0% 0% 35% 4% 0% 26
Sweden 32% 4% 0% 0% 8% 48% 4% 4% 25
UK 36% 18% 0% 0% 0% 45% 0% 0% 11
For the responses under ‘Other’ little relevant information was received. Among the 26
responses, 22 were valid. Six respondents said that the provision doesn’t apply or hadn’t
occurred yet, 1 (from France) said that it happens very rarely. A total of 6 respondents
highlighted that it depends on a case-by-case basis (two from Poland, one from Finland,
one from Bulgaria, one from Spain, one from Germany), and one respondent from the
Netherlands highlighted that it has no single approach (rather it varies) and if the seller
acknowledges the complaint it will be reimbursed. Finally, other responses were
highlighted only once, indicating that it was possible only in case of remote delivery
(Romania), if a manufacturer requires it (Netherlands), only if indicated by the consumer
straight after delivery (Netherlands), 3 days after delivery, one seller will test the product
in front of the consumer (France), and two respondents would discuss the issue with the
customer (Poland and Finland), of which the Polish respondent added that it would try to
find a compromise.
Data on complaints
Q7. In the last 24 months, approximately how many instances of the following
issues has your company encountered? Please provide the absolute number.
Question asked to all respondents, though not all respondents were able to provide
inputs. Response base= 327
The number of instances of an issue a retailer experiences was found to be related to the
size of the retailer. Due to sample constraints, observed differences between countries in
the occurrence of these instances should be interpreted with caution, but a full table with
results is presented in Annex 5. As the sample contains several different sizes of
retailers, it would be misleading to compare across countries without further
disaggregating the results by company size.
The most commonly reported complaints among businesses interviewed related to:
Faulty goods under the legal guarantee;
Issues not covered by the legal guarantee; and
Instances where a customer believed they were entitled to a remedy under the
legal guarantee but the retailer disagreed.
It appears that the businesses interviewed face-to-face retailers deal with more
complaints. However, there was a very wide range of answers in the face-to-face
category and results are rather different depending on the indicator used for presenting
them (i.e. mean, average, maximum). For instance, the mean (the arithmetic mean)
number of issues reported in this category is higher than that commonly experienced.
The tables A3.14 to A3.16 present the mean in consumer complaints per type of
complaint and by sales channel (face-to-face, distance and cross-border).
Table A3.14 Mean number of consumer complaints reported by companies engaged in
face-to-face sales
Mean number of consumer
complaints reported
All
sizes
0-9
employ
ees
10-49
employ
ees
50-250
employ
ees
Respon
ses
Customer complaints regarding faulty
goods (requesting remedies (repair,
104 31 154 254 317
95
replacement, refund, price reduction
etc.) under the legal guarantee)
Complaints regarding other issues not
covered by the legal guarantee
51 21 50 205 313
Your customer thought they were
entitled to a remedy under the legal
guarantee which your company did
not think it was obliged to provide
under the current law
17 11 19 39 309
Table A3.15 Type of consumer complaints reported by companies engaged in distance
sales for all Member States
Mean number of consumer
complaints reported
All
sizes
0-9
employ
ees
10-49
employ
ees
50-250
employ
ees
Respon
ses
Customer complaints regarding faulty
goods (requesting remedies (repair,
replacement, refund, price reduction
etc.) under the legal guarantee)
17 7 24 27 128
Complaints regarding other issues not
covered by the legal guarantee
5 5 3 11 125
Your customer thought they were
entitled to a remedy under the legal
guarantee which your company did
not think it was obliged to provide
under the current law
3 2 4 5 125
Table A3.16 Type of consumer complaints reported by companies engaged in cross-
border sales in other Member States (shown with one decimal due to low
values)
Mean number of consumer
complaints reported
All
sizes
0-9
employ
ees
10-49
employ
ees
50-250
employ
ees*
Respon
ses
Customer complaints regarding faulty
goods (requesting remedies (repair,
replacement, refund, price reduction
etc.) under the legal guarantee)
1.9 0.7 2.6 4.9 327
Complaints regarding other issues not
covered by the legal guarantee
0.5 0.1 0.9 0.8 328
Your customer thought they were
entitled to a remedy under the legal
guarantee which your company did
not think it was obliged to provide
under the current law
0.4 0.1 0.4 1.7 327
Cost of adapting to and complying with different national consumer protection rules across the EU
96
Q8. In your country or in the countries where you sell consumer goods, the
national legislation on consumer remedies for faulty products goes beyond the
minimum requirements under EU legislation. Do the following rules on
consumer remedies for faulty products result in additional costs for your
company or do the benefits prevail?
Question 8 covers the importance for businesses of costs of complying with the legal
guarantee period of longer than 2 years in some Member States (Finland, the
Netherlands, Sweden, the United Kingdom and Ireland), having to proof that the defect
did not exist at the time of delivery up to two years (instead of 6 months), the absence
of an obligation on consumers to notify the seller of a defect within 2 months of
discovering it, the cost of providing a free choice of remedies instead of a hierarchy.
Table A3.17 provides an overview of the cost of adapting to and complying with different
national consumer protection rules across the EU. These four issues are further discussed
under questions 9a to 9d. A full overview of responses by sales channel is provided in
Annex 5.
Table A3.17 Overview of answers to the question: Do the following rules on consumer
remedies for faulty products result in additional costs for your company or do
the benefits prevail?
Q8a. Legal guarantee period longer than 2
years
Q8b. Having to prove that the defect did not
exist at the time of delivery up to two years after
the delivery (instead of 6 months)
Q8c. No obligation for customers to
notify the seller of a defect within 2 months of
discovering it
Q8d. Providing free choice of remedies (the
possibility for the consumer to ask directly for a
refund instead of first having to ask for repair or replacement) instead of a hierarchy of
remedies
Major costs 19.6% 8.8% 11.8% 19.8%
Moderate
costs
16.8% 28.9% 24.7% 33.9%
No
costs/benefi
ts prevail
47.7% 48.2% 50.5% 34.7%
Don't know 15.9% 14.0% 12.9% 11.6%
Base 107 114 186 121
97
Q8a. Cost of: Legal guarantee period longer than 2 years
Question 8a asked to respondents in FI, NL, SE and UK, or selling to FI, IE, NL, SE and/or
UK. Response base= 107
Member States going beyond Directive 1999/44/EC by having a longer legal guarantee:
Finland (unlimited) (part of the interviews)
Ireland (4 years) (not part of the interviews)
Netherlands (unlimited) (part of the interviews)
Sweden (3 years) (part of the interviews)
United Kingdom (6 years in England and Wales, 5 years in Scotland) (part of the
interviews)
Around half (48%) of respondents felt that there were no costs or that benefits prevail in
complying with this legislation. On average twenty per cent felt there were major costs,
none in the UK, but in Finland and the Netherlands almost thirty percent share this
opinion. About 17% felt there to be only moderate costs. This is fairly consistent across
countries, the lowest percentage reporting major costs is in Sweden where only 12%
reported that complying with the legislation produces major costs.
Table A3.18 Cost of: Legal guarantee period longer than 2 years for sellers in FI, NL, SE
and UK, or selling to FI, IE, NL, SE and/or UK
Cost type Finland Netherland
s
Sweden United
Kingdom
No. % No. % No. % No. %
Major costs 8 30% 7 28% 3 12% 0 0%
Moderate costs 4 15% 2 8% 6 24% 2 18%
No costs or benefits prevail 15 56% 10 40% 11 44% 5 45%
Don't know 0 0% 6 28% 5 20% 4 36%
Total 27 100% 25 100% 25 100% 11 100%
Q8b. Cost of: Having to prove that the defect did not exist at the time of delivery
up to two years after the delivery (instead of 6 months)
Question 8b asked to respondents in FR, PL, PT or selling to FR, PL, PT. Response base=
114
Member States going beyond Directive 1999/44/EC by having a longer period for the
reversal of proof:
France (two years) (part of the interviews)
Poland (one year) (part of the interviews)
Portugal (two years) (part of the interviews)
Across all interviewed countries the highest percentage of respondents, (48%) stated
there were no costs/benefits prevail in following this legislation. Generally, base sizes for
individual countries are too low for sub-group analysis, although the results suggest that
retailers in Poland find the process more costly than retailers in France and Portugal with
14% of Polish retailers stating that they incurred major costs, with none in the two other
countries. Interestingly, around one third (36%) of UK respondents and 28% of
respondents in the Netherlands reported that they don't know.
98
Table A3.19 Cost of: Having to prove that the defect did not exist at the time of delivery
up to two years after the delivery (instead of 6 months) – Responses from
retailers in or selling to France, Poland and Portugal
Cost type France Poland Portugal
% No. % No. % No.
Major costs 0% 0 14% 4 0% 0
Moderate costs 29% 6 29% 8 42% 13
No costs or benefits
prevail 67% 14 21% 6 55% 17
Don't know 5% 1 36% 10 3% 1
Total 100% 21 100% 28 100% 31
Q8c. Cost of: No obligation for customers to notify the seller of a defect within
2 months of discovering it
Question 8c asked to respondents in AT, FR, DE, EL, LU, PL and/or UK, or selling to AT,
BE, FR, CZ, DE, DK, EL, IE, LT, LU, NL, PL, SE, SK and/or UK. Response base= 186
Member States going opting for the provision in Directive 1999/44/EC not to
introduce a notification period:
Austria (part of the interviews)
France (part of the interviews)
Germany (part of the interviews)
Greece (part of the interviews)
Ireland (not part of the interviews)
Poland (part of the interviews)
United Kingdom (part of the interviews)
Around half of respondents (51%, ranging from 27% in Greece to 66% in France) found
there to be no costs/benefits prevail with the customer having the responsibility of
notifying the seller of a defect within two months of discovering it. A quarter (25%)
found there to be moderate costs and 12% found the cost high (ranging from 0% in
France to 27% in Greece). 32% of respondents in Poland felt they did not know what the
cost associated with this legislation was to them as a company (figures for the remaining
countries range from 4% to 18%). The data suggests that retailers in Greece (27%),
Poland (18%) and Germany (16%), experience major costs in fulfilling this obligation.
Table A3.20 Cost of: No obligation for customers to notify the seller of a defect within 2
months of discovering it, from or selling in Austria, France, Germany,
Greece, Poland and the United Kingdom
Cost type Austria France German
y
Greece Poland United
Kingdom
No. % No. % No. % No. % No. % No. %
Major costs 3 11% 0 0% 4 16% 7 27% 5 18% 0 0%
Moderate costs 6 21% 5 24% 8 32% 8 31% 6 21% 5 36%
No costs or benefits
prevail
18 64% 4 66% 12 48% 7 27% 8 29% 4 45%
99
Don't know 1 4% 2 10% 1 4% 4 15% 9 32% 2 18%
Total
28 100
%
21 100
%
25 100
%
26 100
%
28 100
%
11 100%
Q8d Cost of: Providing free choice of remedies (the possibility for the consumer
to ask directly for a refund instead of first having to ask for repair or
replacement) instead of a hierarchy of remedies
Question 8d asked to respondents in EL, PT, RO134 and UK, or selling to EL, PT, RO, UK,
IE and/or SI. Response base= 121
Member States going beyond Directive 1999/44/EC by having a free choice of
remedies:
Croatia (not part of the interviews)
Greece (part of the interviews)
Ireland (as well as the short-term right to reject) (not part of the interviews)
Lithuania (not part of the interviews)
Portugal (part of the interviews)
Slovenia (not part of the interviews)
United Kingdom (as well as the short-term right to reject) (part of the
interviews)
In Portugal half of respondents indicated there to be no costs or prevailing benefits, with
nearly 45% indicating either major or moderate costs. In the United Kingdom 36%
reported major or moderate costs, while nearly half (46%) reported no costs or
prevailing benefits.
Table A3.21 Cost of: Providing free choice of remedies (the possibility for the consumer
to ask directly for a refund instead of first having to ask for repair or
replacement) instead of a hierarchy of remedies , from or selling in Greece,
Portugal or the United Kingdom
Cost type Greece Portugal United Kingdom
No. % No. % No. %
Major costs 1 33% 4 13% 2 18%
Moderate costs 0 0% 10 32% 2 18%
No costs or benefits
prevail
2 67% 16 52% 5 46%
Don't know 0 0% 1 3% 2 18%
Total 3 100% 31 100% 11 100%
Potential changes in EU legislation
134 In separate stakeholder interviews with respondents it appeared that there is no free choice of remedies in Romania, and responses were omitted.
100
Q9 In most EU countries, the legal guarantee period is two years. However, in
some EU countries, the legal guarantee period is currently longer than 2 years
or unlimited. What would be the impact on your business if a uniform legal
guarantee period of two years were to be introduced for distance sales (e-
commerce, mail order etc.) and face-to-face sales (bricks and mortar shops
etc.), instead of a situation where there is a uniform two-year guarantee period
only for distance sales, but different rules would apply to products sold face-to-
face? (Multiple answers allowed)
Question asked to all respondents that sell via brick & mortar stores and doorstep selling.
Response base= 351
Over half of retailers (58%) feel there is no impact on their business if uniform rules
were applied, although around one-fifth (21%) did feel this would make for fairer
competition between distance retailers and face-to-face retailers and 13% thought it
would lead to lower costs due to rules being applied consistently across the EU.
Retailers in Sweden, Finland and the UK in particular thought that a uniform rule would
lead to lower costs (38%, 35% and 20% respectively), whereas very few or no retailers
in Bulgaria, Greece and Poland expressed this view (0%, 4% and 4% respectively).
In Spain, 69% of retailers thought that uniform rules would lead to fairer competition and
only 19% believed it would have no impact, suggesting that the differences between
rules for the two types of retailer are felt more keenly in Spain than elsewhere. Results
are shown in Table A3.22 and Table A3.23.
Some respondents highlighted other reasons, including higher costs (5 responses),
higher prices (one response), unfair competition (one response), more competition (one
response), not feasible (one response), or otherwise have negative impacts (three
responses).
Table A3.22 Responses to the multiple choice question on what would be the impacts of
an introduction of a uniform legal guarantee period for two years for both
sales channels
Lower
costs
through
simpler
regime
(same rules
across the
EU for face-
to-face and
distance
sales)
Fairer
competition
between
retailers
selling face-
to-face and
retailers
selling by way
of distance
communicatio
n (e-
commerce,
mail order
etc.)
No impact. The
fact that
different rules
would apply to
products
purchased by
way of distance
communication
as opposed to
face-to-face
sales does not
matter.
Other Don't
know
Base
size
(N=)
All
countrie
s
13% 21% 58% 7% 7% 351
Austria 7% 7% 81% 4% 0% 27
Bulgaria 0% 10% 74% 0% 16% 31
Finland 35% 8% 58% 4% 4% 26
France 10% 15% 75% 5% 0% 20
101
German
y
9% 27% 64% 0% 0% 22
Greece 4% 19% 54% 12% 15% 26
Hungary 9% 9% 61% 17% 9% 23
Luxemb
ourg
7% 13% 67% 7% 7% 15
Netherla
nds
14% 18% 55% 9% 18% 22
Poland 4% 16% 48% 32% 4% 25
Portugal 16% 23% 58% 3% 0% 31
Romania 23% 31% 58% 0% 4% 26
Spain 12% 69% 19% 0% 15% 26
Sweden 38% 38% 48% 5% 0% 21
UK 20% 10% 60% 10% 0% 10
Note: it being a multiple choice question, total response base per Member State can be
higher than 100% where respondents indicated that more than one answers applied.
102
Table A3.23 Responses to the question on what would be the impact of an introduction of a uniform legal guarantee period for two years,
by sales channel and company size
Sales channel Cross-border sales Size (Employees
All
countries
Only face-
to-face
Only
distance
sales
Both Yes No 0-9
employees
10-49
employees
50-250
employees
Lower costs through simpler
regime (same rules across
the EU for face-to-face and
distance sales)
13% 14% 0% 13% 14% 13% 11% 15% 18%
Fairer competition between
retailers selling face-to-face
and retailers selling by way
of distance communication
(e-commerce, mail order
etc.)
21% 23% 0% 18% 18% 23% 21% 20% 26%
No impact. The fact that
different rules would apply
to products purchased by
way of distance
communication as opposed
to face-to-face sales does
not matter
58% 57% 0% 61% 60% 58% 59% 60% 53%
Other 7% 6% 0% 8% 8% 6% 8% 5% 8%
Don't know 7% 6% 0% 7% 5% 7% 8% 5% 5%
Base size 351 222 0 129 85 266 164 149 38
103
Q10. What would be the impact on your business if a period of reversal of
burden of proof of 2 years were to be introduced in all EU countries, so that
the seller must prove that the item was not defective at the time of delivery
during this 2-year period?
Question asked to all respondents. Response base= 375
When prompted by the scenario of an introduction in the whole EU of a longer period
of reversal of burden of proof, the majority of respondents stated that such extension
would represent major (32%, n=121) or moderate costs (19%, n=73), while bringing
none (61%, n=230) or only minor (15%, n=64) benefits.
Respondents from France and Portugal, while agreeing on the limited impact of such
measure in terms of benefits, reported minor concerns in terms of costs. About half of
respondents in both countries stated that they would incur in no costs (France: 48%,
n=10. Portugal: 52%, n=16). This is coherent with the actual legal situation in these
countries where the actual period of reversal of burden of proof is already of two year.
Results are presented in Figure 22 and Table A3.24.
Figure 22. What would be the impact on your business if a period of reversal of burden
of proof of 2 years were to be introduced in all EU countries?
Base: Costs: Major costs 121, Moderate costs 73, Minor costs 55, No costs 99, Don't
know 27,
Benefits: Major benefits 21, Moderate benefits 36, Minor benefits 64, No benefits 230,
Don't know 24.
Table A3.24 Impacts of a period of reversal of burden of proof of 2 years were to be
introduced in all EU countries
Questi
on
Costs Count All
countri
es
Sales channel Cross-border
sales
Only
face-
to-face
Only
distanc
e sales
Both Yes No
COST:
Period
of
reversal
of
burden
of proof
Major
costs
Count 121 59 7 54 38 83
Column
N %
32% 27% 35% 42% 39% 30%
Moderat
e costs
Count 73 46 3 23 16 57
Column
N %
19% 21% 15% 18% 16% 21%
104
Questi
on
Costs Count All
countri
es
Sales channel Cross-border
sales
Only
face-
to-face
Only
distanc
e sales
Both Yes No
of 2
years
were to
be
introduc
ed in all
EU
countrie
s?
Minor c
osts
Count 55 37 2 16 13 42
Column
N %
15% 17% 10% 12% 13% 15%
No
costs
Count 99 62 8 28 26 73
Column
N %
26% 28% 40% 22% 27% 26%
(INT:
Do not
read
out)
Don't
know
Count 27 18 0 8 5 22
Column
N %
7% 8% 0% 6% 5% 8%
Total
Count 375 222 20 129 98 277
Column
N %
100% 100% 100% 100% 100% 100%
BENEFI
TS:
Period
of
reversal
of
burden
of proof
of 2
years
were to
be
introduc
ed in all
EU
countrie
s?
Major
benefits
Count 21 9 3 8 7 14
Column
N %
6% 4% 15% 6% 7% 5%
Moderat
e
benefits
Count 36 26 1 8 7 29
Column
N %
10% 12% 5% 6% 7% 10%
Minor b
enefits
Count 64 36 1 27 13 51
Column
N %
17% 16% 5% 21% 13% 18%
No
benefits
Column
N % 230 133 15 81 65 165
Count 61% 60% 75% 63% 66% 60%
(INT:
Do not
read
out)
Don't
know
Column
N % 24 18 0 5 6 18
Count
6% 8% 0% 4% 6% 6%
Total Column
N % 375 222 20 129 98 277
105
Questi
on
Costs Count All
countri
es
Sales channel Cross-border
sales
Only
face-
to-face
Only
distanc
e sales
Both Yes No
Count
100% 100% 100% 100% 100% 100%
Q11a. Would you consider it fair if consumers had the opportunity to ask for
a full refund?
Question asked to all respondents. Response base= 375
Table A3.25 provides an overview of all responses to the question whether retailers
consider it fair if consumers had the opportunity to ask for a full refund if they are not
satisfied with a first attempt to repair or replace the faulty good. Overall, 59% of
retailers agreed, while 37% did not.
One Spanish respondent motivated that it should be at least after one attempt at
repair or replacement before moving on to a refund. A German respondents pointed
out that in his view a respondent has the right to ask for it after one attempt at repair.
A Dutch and Portuguese respondent highlighted that a business should seek to keep a
customer rather than lose one and reward customer loyalty.
On the general point of whether it would be fair if consumers had the opportunity to
ask for a full refund, six respondents who motivated their answer found it fair to
proceed to refund in case of no satisfaction with the first attempt to repair or if this is
not carried out in a specific amount of time, but would not find it fair to proceed to a
full refund just after the discovery of a defect. Eighteen mentioned that before
proceeding with the full refund, a first attempt to repair the product (thirteen
respondents) should be made or the item should be replaced (five respondents). Five
respondents mentioned that the cause of the defect should be assessed before
proceeding to the refund.
Table A3.25 Responses on whether retailers consider it fair if consumers had the
opportunity to ask for a full refund, by reason
If they are not satisfied with the
first attempt to repair or replace
the faulty good?
Yes No Don't
know
Base
All Countries 59% 37% 5% 375
Austria 50% 39% 11% 28
Bulgaria 74% 19% 6% 31
Finland 48% 52% 0% 27
France 62% 33% 5% 21
Germany 52% 48% 0% 25
Greece 65% 31% 4% 26
106
Hungary 77% 23% 0% 26
Luxembourg 53% 41% 6% 17
Netherlands 56% 36% 8% 25
Poland 54% 36% 11% 28
Portugal 77% 19% 3% 31
Romania 75% 21% 4% 28
Spain 27% 73% 0% 26
Sweden 44% 56% 0% 25
UK 64% 18% 18% 11
Q11b. Why would you consider it unfair if consumers had the opportunity to
ask for a full refund?
Question asked to all respondents that answered to question 11a negatively?.
Response base= 166
About 166135 respondents motivated their negative answer to Q11a?136. Their
underlying consideration is that there is no one-size fits all approach that can be
considered satisfying for any product, as it indeed may depend on the product. There
are goods that by nature are supposed to be used for a sustained amount of time and
can be repaired multiple times and others for which that is not possible or fair.137
About 56 out of these 166respondents consider that before offering a refund, the
faulty good should be repaired and/or replaced.138 32 respondents are afraid that
establishing the possibility of a full refund could allow abuses and misuses of such
right by customers. For example, customers could pay less attention to the correct use
and maintenance of purchased products, or ask for a refund on the basis of defects
that are linked to the normal product life and were not existing at the moment of the
purchase. 20 respondents would require to assess the cause of the defect prior to
establish the most suited course of action (e.g. if due to a product problem or a
customer’s doing). However, they also pointed out that after long time it could be hard
to assess the origin of the defect.
17 respondents considered it unfair to offer a full refund if the defect is discovered or
reported after a long time as the good has already been used and enjoyed by the
consumer.
4 respondents stated that delays in repairing the defective products depend on several
factors that cannot be attributed to the seller (e.g. long time for delivery, especially in
cross-border selling; busy periods (e.g. Christmas); particularly difficult repairing
needed; etc.), and it would be unfair to link to these delays a full refund.
At this regard, about 17 considered unfair only to proceed to a full refund in case the
repair or replacement is not carried out within a specified period as in some cases
these procedures can take longer and be affected by a number of different
circumstances (e.g. delay in delivery) (circumstance mentioned by three
respondents).
135 A total of 219 open answers were provided. Data cleaning highlighted 166 useful answers. 136 As question 11a was part of two other questions in the fairness of a refund, the motivations provided by respondents can mostly not be tied to the specific answer. 137 It should be noted that no information is available about the specific goods in question. 138 Only repair (n=23), only replacement (n=18), both repair and replacement (n=15). From which countries/company sizes do these responses originate?
107
In terms of costs, 15 respondents stated that there would be an increase of costs for
sellers if such possibility was enforced. Costs linked not only to the concrete refund
but to all administrative and practical costs (e.g. payment fees, delivery fees, etc.).
The consequent risk would be an increase of final prices.
Respondents also felt that such possibility would place all the risk of the sale on the
seller (or eventually on the manufacturer), relieving the customer of any due diligence
obligation and exposing the seller to abuses and misuses of such right.
About 26 respondents considered unfair only to proceed to a full refund in case of no
satisfaction with the first attempt of repair the item. 10 would insist for a second
attempt of repair or for replacing the product. Five mentioned that in such case there
could be a risk of abuse of such right.
Q12. What would be the impact on your business of a rule that states that
consumers would no longer be obliged to inform the seller of a defect within
two months of discovering it?
Question asked to all respondents in 15 Member States. Response base= 375
Again, opinion was split on this question, with 29% of respondents stating that the
removal of this obligation would impose major costs and 30% stating it would impose
no costs. In Bulgaria, only 3% stated that this would impose major costs versus 46%
in Greece and 48% in Finland and 44% in Germany. 22% of the interviewed retailers
thought this change would lead to benefits, with 69% stating that this would give no
benefits, a view that was also prevalent in Germany (84%) and Austria (79%). In
view of the sample size no strong differences can be noted for the company size and
sales channel. Full tables are presented per sales channel are presented in Annex 5.
A simple overview of results is presented in Figure 23, while results by Member State
are shown in Table A3.26.
Figure 23. Overview of reported costs and benefits if consumer would no longer be
obliged to inform the seller of a defect within two months of discovering it
Costs Benefits
Table A3.26 Overview of reported costs and benefits if consumer would no longer be
obliged to inform the seller of a defect within two months of discovering it,
by Member State
Costs
Major
costs
Moderat
e costs
Minor
costs
No costs Don't
know
Base
Size
All Countries 29% 15% 17% 30% 9% 375
Austria 21% 18% 29% 29% 4% 28
Bulgaria 3% 13% 6% 45% 32% 31
Finland 48% 7% 22% 22% 0% 27
108
France 19% 19% 10% 38% 14% 21
Germany 44% 8% 20% 28% 0% 25
Greece 46% 0% 19% 35% 0% 26
Hungary 23% 12% 19% 46% 0% 26
Luxembourg 18% 12% 12% 53% 6% 17
Netherlands 32% 16% 12% 24% 16% 25
Poland 46% 14% 4% 18% 18% 28
Portugal 35% 16% 10% 35% 3% 31
Romania 29% 14% 14% 32% 11% 28
Spain 15% 46% 15% 12% 12% 26
Sweden 32% 16% 36% 16% 0% 25
UK 9% 18% 36% 18% 18% 11
Benefits Major
benefits
Moderate
benefits
Minor
benefits
No
benefits
Don't
know Base size
All Countries 4% 7% 11% 69% 8% 375
Austria 0% 11% 11% 79% 0% 28
Bulgaria 3% 3% 10% 52% 32% 31
Finland 0% 0% 7% 93% 0% 27
France 5% 10% 14% 57% 14% 21
Germany 12% 4% 0% 84% 0% 25
Greece 12% 8% 19% 62% 0% 26
Hungary 0% 4% 8% 85% 4% 26
Luxembourg 0% 29% 6% 59% 6% 17
Netherlands 8% 8% 8% 60% 16% 25
Poland 4% 4% 7% 68% 18% 28
Portugal 6% 10% 0% 81% 3% 31
Romania 7% 7% 25% 54% 7% 28
Spain 0% 4% 19% 65% 12% 26
Sweden 4% 8% 16% 72% 0% 25
UK 0% 18% 27% 45% 9% 11
Q13. You indicated that a change in legislation would have an impact on the
costs of your company. Can you please elaborate? How would the legislative
change impact the costs of your company? Which costs would change?
Question asked to all respondents who indicated there to be major costs, moderate
costs or minor costs under question Q13?. Response base=329.
The number of respondents who provided a written response to the above question is
outlined in Table A3.27.
Table A3.27 Overview of responses to open question 13
All AT BG DE EL ES FI FR HU LU NL PL PT RO SE UK
109
Res
pon
ses
329 22 26 23 18 25 23 18 23 15 22 25 27 28 25 9
Most retailers recognised that a change in legislation would entail costs for their
business. Costs would mainly accrue from an increase in the number of requests for
repairs or replacement products. As such, the shared view was that the increase in
after-sales services would require businesses to take on additional staff or increase
working time to deal with these requests.
Other costs commonly reported were: (1) administrative costs (e.g. telephone
expenses from increased correspondence with manufacturers , record-keeping), (2)
shipping/transport/delivery costs, (3) storage costs (as a result of retailers having to
stock more goods and meet unexpected demand for new or replacement products),
and (4) raw material/spare parts-related costs. Additional information is provided in
Annex 5.
Some retailers also envisaged substantial costs (e.g. legal fees, consulting fees)
arising from disputes and court action. There were concerns that consumers may
misuse guarantees in order to obtain new products, over the long term, for every
purchase.
In spite of the costs entailed by a legislative change, many retailers perceive an
increase in the quality of consumer products. As such, it is expected that
manufacturers will seek to improve the functionality and durability of their products in
order to limit the number of requests for repairs or replacement. While this will prove
beneficial to consumers, there are concerns that the increase in quality will push
prices up.
Selected findings (verbatim responses)
Notable costs likely to be incurred by retailers
"In the fashion sector, it would be impossible. We would have more cases of complaints. This would result in us having more products in stock which you would not be able to sell anymore. Basically, you can't determine a guarantee period for clothing” (Austria).
"[...] a change in legislation would imply an increase of the expenses related to the wages and the hiring of people, who would repair the products […]" (Romania).
"You need additional staff to manage all this. I estimate an additional cost of about €30,000 euros to my business each year" (France).
"If customers wait too long that can cause further faults and multiply the costs" (Retailer,
Sweden).
Costs associated with disputes/court action
"[...]. By placing all kinds of [...] rights with the customer, too much power goes to one particular party. [...]" (Netherlands).
"Everything would come down to litigation. Instead of working and bringing profits, the company would be in court all the time. Lengthy proceedings and potentially bad judicial decisions would make running a business in this industry virtually impossible” (Poland).
Anticipated increase in prices
"Manufacturers will aim to offer better quality. The products will become increasingly expensive [...]" (Germany).
Q14. Are there any of the mentioned legislative changes that you would in
particular favour or disfavour? Why?
Question asked to all respondents. Response base=344.
110
The number of respondents who provided a verbatim response to the above question
is outlined in Table A3.28.
Table A3.28 Overview of responses to open question 14
All AT BG DE EL ES FI FR HU LU NL PL PT RO SE UK
Cou
nt
344 27 30 23 18 26 25 14 25 14 25 28 31 28 21 9
Retailers held mixed views as regards the proposed changes. Several retailers felt that
some changes would be beneficial, though others would present significant costs to
businesses. Some retailers appeared to welcome the proposition to harmonise rules
across EU Member States. About 33 respondents (10%) welcomed the proposition to
harmonise the rules. In addition, 23 (6.7%) recognised there will be benefits (other
than harmonisation), 133 (38.7%) were critical of specific measures or did not favour
some or all of the proposed measures. Finally, 150 respondents (43.6%) provide a
number of other responses, including: not being able to provide a clear-cut answer or
had mixed feelings, did not have any preference or were indifferent, felt it was too
early to know, felt that one or more measures do not apply to their business, or felt
that nothing should change. There were also numerous unclear responses in this
group. Further information is provided in Annex 5.
Q15a. Overall impact of fully harmonising EU Rules: A single set of rules will
increase competition in the retail sector in the EU
Question asked to all respondents. Response base=375.
On the statement whether a single set of rules will increase competition in the retail
sector in the EU, 20% of respondents strongly agreed and 34% agreed, meaning that
the majority of respondents in the 15 countries feels that a single set of rules will
increase competition. In Spain, 89% of respondents agreed or strongly agreed with
this statement as opposed to only 24% in the Netherlands. There was especially
strong opposition on this point from respondents in Poland (47%) and the Netherlands
(44%).
Table A3.29 Overview of responses on the statement: A single set of rules will increase
competition in the retail sector in the EU
Strongly
agree
Agree Neither
agree or
disagree
Disagre
e
Strongly
disagree
Don't
Know
Base
All
Countries
20% 34% 19% 16% 7% 4% 375
Austria 14% 25% 36% 21% 0% 4% 28
Bulgaria 6% 65% 3% 23% 0% 3% 31
Finland 33% 33% 19% 15% 0% 0% 27
France 33% 10% 33% 5% 14% 5% 21
Germany 4% 48% 28% 16% 4% 0% 25
Greece 46% 15% 19% 12% 4% 4% 26
Hungary 19% 35% 8% 15% 8% 15% 26
Luxembo
urg
41% 12% 18% 0% 24% 6% 17
Netherlan
ds
0% 24% 28% 24% 20% 4% 25
111
Strongly
agree
Agree Neither
agree or
disagree
Disagre
e
Strongly
disagree
Don't
Know
Base
Poland 14% 25% 11% 36% 11% 4% 28
Portugal 13% 52% 10% 23% 3% 0% 31
Romania 32% 21% 36% 7% 0% 4% 28
Spain 31% 58% 4% 4% 4% 0% 26
Sweden 8% 36% 12% 16% 12% 16% 25
UK 18% 27% 36% 9% 9% 0% 11
Q15b. Overall impact of fully harmonising EU Rules: A single set of rules will
increase competition in our domestic market from retailers based in other EU
countries
On the statement whether a single set of rules will increase competition in the
domestic market from retailers based in other EU countries, 16% of respondents
strongly agreed and 36% agreed, meaning that a majority of respondents felt that EU
competition would increase. In Bulgaria 75% agreed or strongly agreed, while only
20% of respondents from the Netherlands held this view.
Table A3.30 Overview of responses on the statement: A single set of rules will increase
competition in our domestic market from retailers based in other EU
countries
Strongly
agree
Agree Neither
agree or
disagree
Disagre
e
Strongly
disagree
Don't
Know
Base
All
Countries
16% 36% 21% 16% 7% 5% 375
Austria 7% 29% 36% 21% 0% 7% 28
Bulgaria 10% 65% 0% 13% 0% 13% 31
Finland 22% 41% 19% 15% 0% 4% 27
France 33% 10% 33% 5% 14% 5% 21
Germany 4% 28% 44% 20% 4% 0% 25
Greece 42% 12% 23% 12% 8% 4% 26
Hungary 19% 35% 12% 15% 12% 8% 26
Luxembo
urg
41% 12% 18% 0% 18% 12% 17
Netherlan
ds
4% 16% 20% 44% 12% 4% 25
Poland 7% 25% 25% 29% 7% 7% 28
Portugal 3% 61% 13% 16% 6% 0% 31
Romania 18% 43% 21% 7% 7% 4% 28
Spain 15% 50% 19% 12% 4% 0% 26
Sweden 12% 52% 4% 12% 8% 12% 25
UK 9% 36% 36% 9% 9% 0% 11
112
Q15c. Overall impact of fully harmonising EU Rules: A single set of rules will
result in lower prices for consumers
Overall, slightly more respondents disagreed than agreed that a single set of rules
across the EU would lower prices for consumers, with 29% disagreeing and 16%
strongly disagreeing. Conversely, 9% of retailers strongly agreed and 23% agreed,
reflecting the fact that opinions were relatively mixed. The highest levels of agreement
came from Greece, where 27% strongly agreed that prices would lower and 15%
agreed, as well as Romania where 18% strongly agreed and 29% agreed.
At the same time, only 9% of sellers from the UK agreed that a single set of rules
across the EU would lower prices for consumers, while 72% of sellers in Germany
disagreed or strongly disagreed.
Table A3.31 Overview of responses on the statement: A single set of rules will result in
lower prices for consumers
Strongl
y agree
Agree Neither
agree
or
disagre
e
Disagre
e
Strongl
y
disagre
e
Don't
Know
Base
All
Countries
9% 23% 18% 29% 16% 5% 375
Austria 11% 32% 14% 32% 7% 4% 28
Bulgaria 6% 32% 16% 39% 0% 6% 31
Finland 11% 26% 15% 22% 26% 0% 27
France 10% 14% 33% 5% 33% 5% 21
Germany 8% 12% 8% 68% 4% 0% 25
Greece 27% 15% 12% 12% 27% 8% 26
Hungary 4% 12% 23% 31% 23% 8% 26
Luxembour
g
6% 29% 18% 6% 29% 12% 17
Netherlands 0% 24% 8% 40% 20% 8% 25
Poland 7% 14% 21% 39% 14% 4% 28
Portugal 3% 39% 6% 39% 3% 10% 31
Romania 18% 29% 7% 11% 29% 7% 28
Spain 0% 15% 58% 19% 0% 8% 26
Sweden 12% 24% 12% 32% 20% 0% 25
UK 0% 9% 36% 36% 18% 0% 11
Q15d. Overall impact of fully harmonising EU Rules: A single set of rules will
lead to reduced margins for retailers
More respondents agreed than disagreed that a single set of rules would lead to
reduced margins for retailers. Agreement was particularly high in Bulgaria (68%
agreed and 3% strongly agreed), Greece (54% strongly agreed and 8% agreed) and
the Netherlands (4% strongly agreed and 56% agreed).
At the same time, 27% of sellers from the UK agreed or strongly agreed that a single
set of rules across the EU will lead to reduced margins for retailers, while 50% of
sellers in Hungary disagreed or strongly disagreed.
113
Table A3.32 Overview of responses on the statement: A single set of rules will lead to
reduced margins for retailers
Strongl
y agree
Agree Neither
agree
or
disagre
e
Disagre
e
Strongl
y
disagre
e
Don't
Know
Base
All
Countries
18% 31% 18% 19% 8% 6% 375
Austria 14% 32% 14% 29% 0% 11% 28
Bulgaria 3% 68% 6% 16% 0% 6% 31
Finland 19% 30% 15% 22% 15% 0% 27
France 33% 14% 14% 10% 24% 5% 21
Germany 12% 40% 16% 20% 8% 4% 25
Greece 54% 8% 23% 8% 8% 0% 26
Hungary 12% 19% 0% 31% 19% 19% 26
Luxembour
g
29% 24% 12% 6% 18% 12% 17
Netherlands 4% 56% 16% 16% 4% 4% 25
Poland 11% 25% 25% 25% 11% 4% 28
Portugal 10% 35% 13% 32% 0% 10% 31
Romania 25% 32% 18% 7% 11% 7% 28
Spain 12% 12% 54% 23% 0% 0% 26
Sweden 32% 32% 12% 12% 8% 4% 25
UK 0% 27% 55% 18% 0% 0% 11
Q15e. Overall impact of fully harmonising EU Rules: The increase in the
reversal of the burden of proof period (i.e. sellers must prove that the item
was not defective for the entire duration of the legal guarantee) will increase
the quality and durability of goods
Overall, there is no strong direction of opinion among retailers on whether the reversal
of the burden of proof would increase the quality and durability of goods. However,
there are significant country differences. More retailers in Romania, Greece and
Portugal agree than elsewhere.
At the same time, only 12% of sellers from Spain agreed or strongly agreed that an
increase in the reversal of the burden of proof period will increase the quality and
durability of goods and 58% disagreed or strongly disagreed, while 11% of sellers in
Romania disagreed or strongly disagreed, and instead 64% agreed or strongly agreed.
114
Table A3.33 Overview of responses on the statement: The increase in the reversal of
the burden of proof period (i.e. sellers must prove that the item was not
defective for the entire duration of the legal guarantee) will increase the
quality and durability of goods
Strongl
y agree
Agree Neither
agree
or
disagre
e
Disagre
e
Strongl
y
disagre
e
Don't
Know
Base
All
Countries
12% 29% 17% 22% 15% 5% 375
Austria 4% 18% 25% 39% 11% 4% 28
Bulgaria 0% 48% 10% 26% 0% 16% 31
Finland 4% 30% 4% 30% 33% 0% 27
France 29% 19% 19% 0% 29% 5% 21
Germany 0% 40% 24% 20% 12% 4% 25
Greece 42% 12% 19% 0% 27% 0% 26
Hungary 15% 31% 4% 19% 23% 8% 26
Luxembour
g
18% 24% 24% 0% 29% 6% 17
Netherlands 4% 40% 16% 28% 8% 4% 25
Poland 4% 18% 21% 36% 14% 7% 28
Portugal 3% 52% 16% 23% 3% 3% 31
Romania 32% 32% 18% 7% 4% 7% 28
Spain 4% 8% 27% 50% 8% 4% 26
Sweden 16% 32% 12% 20% 20% 0% 25
UK 18% 27% 9% 27% 9% 9% 11
Q15f. Overall impact of fully harmonising EU Rules: : The reduction in the
legal guarantee period in countries that now have a longer period will reduce
the quality and durability of goods in these countries
More respondents disagreed than agreed that the reduction in the legal guarantee
period would reduce the quality and durability of goods (33% vs. 46%). There was
higher agreement in Romania, Hungary and Bulgaria that this would occur (50%, 50%
and 48% respectively). Most pronounced disagreement was found in Finland (63%),
least in UK (27%).
Table A3.34 Overview of responses on the statement: The reduction in the legal
guarantee period in countries that now have a longer period will reduce
the quality and durability of goods in these countries
Strongl
y agree
Agree Neither
agree
or
disagre
e
Disagre
e
Strongl
y
disagre
e
Don't
Know
Base
115
Strongl
y agree
Agree Neither
agree
or
disagre
e
Disagre
e
Strongl
y
disagre
e
Don't
Know
Base
All
Countries
11% 22% 13% 30% 16% 8% 375
Austria 4% 18% 18% 46% 11% 4% 28
Bulgaria 0% 48% 6% 29% 0% 16% 31
Finland 7% 19% 7% 33% 30% 4% 27
France 14% 5% 33% 5% 33% 10% 21
Germany 8% 28% 28% 32% 0% 4% 25
Greece 23% 4% 12% 15% 42% 4% 26
Hungary 31% 19% 8% 19% 15% 8% 26
Luxembour
g
18% 24% 6% 12% 29% 12% 17
Netherlands 0% 20% 20% 40% 12% 8% 25
Poland 7% 25% 7% 25% 21% 14% 28
Portugal 3% 29% 6% 45% 10% 6% 31
Romania 29% 21% 18% 14% 14% 4% 28
Spain 0% 23% 15% 58% 0% 4% 26
Sweden 12% 16% 8% 40% 16% 8% 25
UK 18% 27% 9% 18% 9% 18% 11
116
Annex 4 Business interviews questionnaire139
Screening questions
[ASK ALL]
S1. Does your company sell directly to consumers?
[ONE ANSWER ONLY]
1. Yes
2. No [STOP SURVEY]
[ASK ALL]
S2. Which of the following do you sell to consumers?
[READ OUT, MULTIPLE ANSWERS POSSIBLE]
1. Food products
2. Non-food products
3. Services
[IF S2 NOT EQUAL TO 2, STOP SURVEY]
[ASK ALL]
S3. What exactly is your position in the company?
[DO NOT READ OUT, ONE ANSWER ONLY]
1. General manager
2. Commercial/Sales manager
3. Marketing manager
4. Other
[ASK IF S3=4]
S4. Do you have a decision making responsibility within your company?
[ONE ANSWER ONLY]
1. Yes
2. No
[ASK IF S4=2]
S4a. I am very sorry but for this study we may only interview respondents
that have decision making responsibilities. Can you please let me know what
is the name of the commercial manager, sales manager or marketing
manager?
[INTERVIEWER: WRITE DOWN THE NAME AND PHONE NUMBER OF THE REFERRAL]
[IF REFERRAL POSSIBLE START WITH S3 AGAIN; IF NO REFERRAL POSSIBLE, STOP
SURVEY]
Part 1: About the company (demographics)
D1. Is your company….?
[READ OUT, ONE ANSWER ONLY]
1. An independent retailer
2. A retail group
3. A group of companies active in retail and other activities
139 A questionnaire was developed for the business interviews that included a number of screening questions, and 37 main questions. For the purposes of this report 15 main questions of this questionnaire have been used and are presented sequentially. The Study on the costs and benefits of extending certain rights under the Consumer Sales and Guarantees Directive 1999/94/EC) equally uses a number of questions from the questionnaire, also ranked sequentially.
117
[READ IF D1=2]
Please answer the remaining questions in this survey for the entire group.
[READ IF D1=3]
Please answer the remaining questions in this survey for the group’s retail
operations only.
[ASK ALL]
D2. How many people does your [company (if D1=1)/group (if D1=2 or 3)]
currently employ?
[ONE ANSWER ONLY]
[INTERVIEWER: CODE RESPONSE USING LIST. IF RESPONDENT CANNOT GIVE EXACT
VALUE, READ OUT RESPONSE CATEGORIES]
1. No employees (self-employed)
2. 1 to 9 employees
3. 10 to 49 employees
4. 50 to 249 employees140
5. 250 to 4999 employees
6. 5000 employees or more
9. Don’t know
[ASK ALL]
D3. What was your [company’s (if D1=1)/group’s (if D1=2 or 3)] turnover in
2015?
[ONE ANSWER ONLY]
[INTERVIEWER: CODE RESPONSE USING LIST. IF RESPONDENT CANNOT GIVE EXACT
VALUE, READ OUT RESPONSE CATEGORIES]
[SCALE IN LOCAL CURRENCY]
[IF D2=1, 2, 3, 4 o 9]
1. Less than 100,000 euros
2. 100,000 to 500,000 euros
3. 500,000 to 2 million euros
4. 2 to 10 million euros
5. 10 to 50 million euros
6. More than 50 million euros
99. Don’t know
[IF D2=5 or 6]
1. Less than 10 million euros
2. 10-50 million euros
6. 50-100 million euros
7. 100-150 million euros
8. 150-200 million euros
9. 200-250 million euros
10. Over 250 million euros
99. Don’t know
[ASK ALL]
D4. Which of the following products does your [company (if D1=1)/group (if
D1=2 or 3)] currently sell directly to consumers?
[INTERVIEWER: CODE RESPONSE USING LIST. MULTIPLE ANSWERS POSSIBLE]
1. Clothing, footwear and accessories
2. Beauty, health and wellness
3. Entertainment - books, magazines, Vinyl, CDs/ DVDs (movies, music, games)
4. Sports and outdoors
5. Toys
140 Only businesses with up to 250 employees were interviewed. No interviews were carried out with large interviews (over 250 employees).
118
6. Electronic/ digital goods (cameras, laptops, gaming consoles, mobile phones,
tablets etc.)
7. Small household appliances (e.g. toasters, kettles, etc.)
8. Large household appliances (e.g. dish washers, washing machines, etc.)
9. Furniture, furnishings and decoration (including do-it-yourself goods and
maintenance products)
10. Cars, motorbikes, bikes or parts
11. Other products, please specify:___________
[ASK ALL]
D5. Which of the following channels does your [company (if D1=1)/group (if
D1=2 or 3)] use to sell directly to consumers?
[READ OUT, MULTIPLE ANSWERS POSSIBLE]
1. Bricks & mortar stores, i.e. physical shops
2. Doorstep-selling (including promotional/sales events at private homes,
work places or during excursions)
3. E- commerce, including mobile-commerce
4. Telephone sales
5. Mail order/ catalogue sales via post
6. Other, please specify: ___________
D6. Approximately what percentage of your [company’s (if D1=1)/group’s (if
D1=2 or 3)] annual turnover comes from sales to consumers via:
[SCRIPT: DISPLAY ERROR MESSAGE IF SUM OF A-C IS MORE THAN 100%]
a. [ASK IF D5=1 or 2] Face-to-face sales channels (through bricks-and
mortar shops or doorstep-selling)?
___% [VALUE BETWEEN 1 and 100] [Don’t know=999]
b. [ASK IF D5=3, 4 or 5] Distance sales channels (e-commerce, telephone
sales, mail order/catalogue sales via post)?
___% [VALUE BETWEEN 1 and 100] [Don’t know=999]
c. [ASK IF D5=6] Other sales channels?
___% [VALUE BETWEEN 1 and 100] [Don’t know=999]
Part 2: Sales to consumers based in other EU countries
[ASK ALL]
CROSS-BORDER_Q1. Does your company sell products to consumers in more
than one EU-country through face-to-face channels (through subsidiaries,
branches and retail outlets in other countries or doorstep selling), or distance
sales channels (e-commerce, telephone sales, mail order/ catalogue sales via
post)?
[READ OUT, ONE ANSWER ONLY]
[INTERVIEWER: EXPLAIN THAT CROSS-BORDER SALES DO NOT INCLUDE SALES TO
CONSUMERS FROM ANOTHER EU COUNTRY WHO COME TO RESPONDENT’S PHYSICAL
SHOP(S)]
1. Yes
2. No, we only sell domestically, i.e. in one EU country
[READ OUT IF CROSS-BORDER_Q1=1]
The following questions are about sales to consumers in different (at least
two) EU countries. This does not include sales to consumers based outside
the EU.
[ASK IF CROSS-BORDER_Q1=1]
CROSS-BORDER_Q2. Which of the following channels do you use for sales to
consumers based in different EU countries?
[READ OUT, MULTIPLE ANSWERS ALLOWED]
119
[SCRIPT: LIST ONLY OPTIONS SELECTED IN D5]
1. Bricks & mortar stores i.e. physical shops
2. Doorstep-selling (including promotional/sales events at private homes,
work places or during excursions)
3. E- commerce, including mobile-commerce
4. Telephone sales
5. Mail order/ catalogue sales via post
6. Other
9. Don’t know [SPONTANEOUS]
[ASK IF CROSS-BORDER_Q2=1 or 2]
CROSS-BORDER_Q3a. In/to which EU countries do you sell to consumers via
face-to-face channels (including through bricks-and mortar shops or
doorstep-selling)?
[MULTIPLE ANSWERS ALLOWED]
[INTERVIEWER: PROMPT FOR OWN COUNTRY: ASK IF THEY ALSO SELL FACE-TO-
FACE IN OWN COUNTRY]
[SCRIPT: ADD LIST OF EU28 COUNTRIES]
[ASK IF CROSS-BORDER_Q2=3, 4 or 5]
CROSS-BORDER_Q3b. In/to which EU countries do you sell to consumers via
distance sales channels (including by way of e-commerce or mail order)?
[MULTIPLE ANSWERS ALLOWED]
[INTERVIEWER: PROMPT FOR OWN COUNTRY: ASK IF THEY ALSO SELL VIA DISTANCE
IN OWN COUNTRY]
[SCRIPT: ADD LIST OF EU28 COUNTRIES]
[ASK IF CROSS-BORDER_Q1=1]
CROSS-BORDER_Q4. Approximately what proportion of your [company’s (if
D1=1)/group’s (if D1=2 or 3)] annual turnover comes from sales to
consumers based in other EU countries than your own country [IF D1=2 or 3:
ADD] (the EU country where your headquarters are based)?
[READ OUT, ONE ANSWER ONLY]
1. Less than 5%
2. 5 to 10%
3. 10 to 20%
4. 20 to 50%
5. Over 50%
9. Don’t know [SPONTANEOUS]
[ASK IF CROSS-BORDER_Q1=2]
CROSS-BORDER_Q5. What are your company’s reasons for not selling to
consumers in different EU countries? Please select up to the three most
important reasons.
[READ OUT, UP TO THREE ANSWERS ALLOWED]
1. We are not interested in selling cross-border
2. Language / cultural differences
3. Cost of market entry
4. The need to adapt and comply with different consumer protection rules
5. The need to adapt and comply with different tax systems (corporate tax, VAT)
6. Formal requirements e.g. licensing, registration procedures
7. Logistical challenges e.g. delivery costs, identification of appropriate
distribution channels
8. Problems in resolving cross-border conflicts, including costs of litigation abroad
9. Problems with cross-border delivery
10. After-sales maintenance abroad
11. Other
120
99. Don’t know [SPONTANEOUS]
Part 3: Legal guarantee
[READ OUT]
The “legal guarantee”, also referred to as a “statutory guarantee”, is a legal
requirement under EU law for consumer goods to be in conformity with the contract
(i.e. to be free from built-in defects). As a result, consumers across the EU have the
right to ask the seller to remedy the lack of conformity, free of charge and during a
given period from the date of delivery. The legal guarantee does not apply if the
consumer damaged the product by mishandling it. The legal guarantee should also not
be confused with the “right of withdrawal”, i.e. the right to return goods purchased
online or through other distance sales within two weeks, regardless of whether they
are defective or not.
A “commercial guarantee” or “warranty” is sometimes offered to consumers in
addition to the legal guarantee. Commercial guarantees are offered by the sellers
themselves or by a manufacturer/producer (referred to as “manufacturer’s
guarantee"). Commercial guarantees can be either free-of-charge (i.e. included in the
price of the good) or offered at an extra cost.
[ASK ALL]
Q1a. Can you tell me the legal (statutory) guarantee period for sellers and
retailers in your country [IF D1=2 or 3: ADD] (the EU country where your
headquarters are based)?
[READ OUT, MULTIPLE ANSWERS ALLOWED] [INTERVIEWER: DO NOT PROMPT FOR
MULTIPLE ANSWERS]
1. 6 months
2. 1 year
3. 2 years
4. 3 years
5. 5 years or 6 years
6. There is no such time period
9. Don’t know [SPONTANEOUS]
[ASK IF CROSS-BORDER_Q1=1]
Q2. And what is the legal guarantee period for sellers in the following
countries?
[READ OUT SCALE, ONE ANSWER PER LINE. SELECT MAX. TWO RANDOM COUNTRIES
FROM CROSS-BORDER_Q3a OR CROSS-BORDER_Q3b]
6
month
s
1
year
2
years
3
years
5 or
6
years
There
is no
such
time
period
Don’t
know
[SPONT
ANEOUS
]
CROSS-
BORDER_Q3a/b
CROSS-
BORDER_Q3a/b
[ASK ALL]
121
Q3. In case a consumer is not satisfied with a repair /replacement of faulty
goods during the legal guarantee period, what action does your company
normally take?
[READ OUT, MULTIPLE ANSWER ALLOWED]
1. We insist on one additional attempt to repair or replace the good (even if that
may take some time)
2. We insist on more than one additional attempt to repair or replace the good
(even if that may take some time)
3. We offer a full refund
4. We offer a partial refund or a price reduction (i.e. less than the original sale
price of the product)
5. We offer compensation in credit note or in vouchers
6. Other, please specify:___________
9. Don’t know [SPONTANEOUS]
[ASK ALL]
Q4a. Approximately what share of consumers who complain that a good is
faulty directly ask for a full refund?
[INTERVIEWER NOTE: stress the word “directly”]
[WRITE IN PERCENTAGE] [VALUE BETWEEN 0 and 100] [Don’t know=999]
______%
[ASK IN UK OR IF CROSS-BORDER_Q3a or Q3b=UK]
Q4b. Approximately what share of consumers exercise their right to reject a
defective good within 30 days of delivery?
[INTERVIEWER explain that this should not be confused with the 14-day right of
withdrawal for distance sales]
[WRITE IN PERCENTAGE] [VALUE BETWEEN 0 and 100] [Don’t know=999]
______%
[ASK IF D5=(1 or 2) and D5=(3, 4 or 5)]
Q5a. Are there any differences in the remedies offered by your company for
faulty products for distance sales (e-commerce, mail order etc.) as opposed
to face-to-face sales (bricks and mortar shops and doorstep selling)?
[ONE ANSWER ONLY]
1. Yes
2. No
9. Don’t know [SPONTANEOUS]
[ASK IF Q5=1]
Q5b. Please explain why there are differences in the remedies offered by your
company for faulty products for distance sales as opposed to face-to-face
sales:
[OPEN TEXT BOX]
[ASK ALL]
Q6. Do you require consumers to prove that the defect (including a lack of
quality or performance feature) existed at the time of delivery before offering
them a remedy?
[INTERVIEWER NOTE: stress “require to prove”]
[READ OUT, ONE ANSWER ONLY]
1. Yes, always
2. Yes, but only after six months from the delivery
3. Yes, but only after one year from the delivery
4. Yes, but only after 2 years from the delivery
5. No, not if they are loyal/known customers
6. No, we usually do not ask for this proof
122
7. Other, please specify:____________
9. Don’t know [SPONTANEOUS]
Part 4: Data on complaints
[ASK ALL]
Q7. In the last 24 months, approximately how many instances of the
following issues has your company encountered? Please provide the absolute
number.
[NUMERICAL ANSWER. ONE ANSWER PER LINE] [000=DON’T KNOW]
[IF D5=1 or
2]
Face-to-
face sales
[IF D5=3, 4
or 5]
Distance
sales in
[country]
[IF D5=3, 4
or 5 AND
CROSS-
BORDER_Q1
=1]
Distance
sales in
other EU
countries
a. Customer complaints regarding
faulty goods (requesting remedies
(repair, replacement, refund, price
reduction etc.) under the legal
guarantee)
[INTERVIEWER: if necessary, for
distance sales, add this is only about
complaints for faulty goods, and is not
to be confused with the right to return
goods purchased within 14-days of
delivery regardless of a defect]
b. Complaints regarding other issues
not covered by the legal guarantee
c. Your customer thought they were
entitled to a remedy under the legal
guarantee which your company did not
think it was obliged to provide under
the current law
Part 5: Cost of adapting to and complying with different national consumer protection rules across the EU
Q8. In your country or in the countries where you sell consumer goods, the
national legislation on consumer remedies for faulty products goes beyond
the minimum requirements under EU legislation. Do the following rules on
consumer remedies for faulty products result in additional costs for your
company or do the benefits prevail?
[INTERVIEWER EXPLAIN: benefits could include improved competitive position,
increased customer satisfaction, better quality and durability of products]
[ONE ANSWER PER LINE]
123
1. Major
costs
2.
Moderate
costs
3. No
costs/ben
efits
prevail
9. Don’t know
[SPONTANEO
US]
[ASK IN (FI, NL, SE, UK) OR IF
(CROSS-BORDER_Q3a= FI, NL,
SE, UK) OR (CROSS-
BORDER_Q3b= FI, NL, SE, UK)]
a. Legal guarantee period
longer than 2 years
[ASK IN (FR, PL, PT) OR IF
(CROSS-BORDER_Q3a= FR, PL,
PT, SK) OR (CROSS-
BORDER_Q3b= FR, PL, PT, SK)]
b. Having to prove that the
defect did not exist at the time
of delivery up to two years after
the delivery (instead of 6
months)
[ASK IN (AT, FR, DE, EL, LU,
PL, UK ) OR IF (CROSS-
BORDER_Q3a= AT, BE, FR, CZ,
DE, DK, EL, IE, LT, LU, NL, PL,
SE, SK, UK) OR (CROSS-
BORDER_Q3b= AT, BE, FR, CZ,
DE, DK, EL, IE, LT, LU, NL, PL,
SE, SK, UK)]
c. No obligation for customers
to notify the seller of a defect
within 2 months of discovering
it
[ASK IN (EL, PT, RO, UK) OR IF
(CROSS-BORDER_Q3a= EL,
PT, RO, UK, IE, SI) OR
(CROSS-BORDER_Q3b=EL, PT,
RO, UK, IE, SI)] d. Providing free choice of
remedies (the possibility for
the consumer to ask directly
for a refund instead of first
having to ask for repair or
replacement) instead of a
hierarchy of remedies
Part 6: Potential changes in EU legislation
[ASK IF D5=1 or 2]
124
Q9. In most EU countries, the legal guarantee period is two years. However,
in some EU countries, the legal guarantee period is currently longer than 2
years or unlimited. What would be the impact on your business if a uniform
legal guarantee period of two years were to be introduced for distance sales
(e-commerce, mail order etc.) and face-to-face sales (bricks and mortar
shops etc.), instead of a situation where there is a uniform two-year
guarantee period only for distance sales, but different rules would apply to
products sold face-to-face?
[MULTIPLE ANSWERS ALLOWED]
1. Lower costs through simpler regime (same rules across the EU for face-to-face
and distance sales)
2. Fairer competition between retailers selling face-to-face and retailers selling by
way of distance communication (e-commerce, mail order etc.)
3. No impact. The fact that different rules would apply to products purchased by
way of distance communication as opposed to face-to-face sales does not
matter.
4. Other, please specify
9. Don’t know [SPONTANEOUS]
[ASK ALL]
Q10. In most EU countries, during the first 6 months, the seller must prove that the
item was not defective when it was delivered to the consumer in order to avoid
remedies (this is referred to as the “reversal of burden of proof”). After 6 months, the
consumer must prove that the defect existed at the time of delivery. This period is
longer in Poland (one year), France and Portugal (both 2 years).
Q10. What would be the impact on your business if a period of reversal of
burden of proof of 2 years were to be introduced in all EU countries, so that
the seller must prove that the item was not defective at the time of delivery
during this 2-year period
a. In terms of costs?
[READ OUT, ONE ANSWER ONLY]
- Major costs
- Moderate costs
- Minor costs
- No costs
- Don’t know [SPONTANEOUS]
b. And in terms of benefits?
[READ OUT, ONE ANSWER ONLY]
- Major benefits
- Moderate benefits
- Minor benefits
- No benefits
- Don’t know [SPONTANEOUS]
[ASK ALL]
Q11a. Would you consider it fair if consumers had the opportunity to ask for
a full refund:
[ONE ANSWER PER LINE]
1.
Yes
2. No 9. Don’t know
[SPONTANEO
US]
if they are not satisfied with the first attempt to
repair or replace the faulty good?
125
[ASK IF Q29a=2 or Q29b=2 or Q29c=2]
Q11b. Why would you consider it unfair if consumers had the opportunity to
ask for a full refund?
[OPEN TEXT BOX]
[ASK ALL]
Q12. What would be the impact on your business of a rule that states that
consumers would no longer be obliged to inform the seller of a defect within
two months of discovering it?
a. In terms of costs?
[READ OUT, ONE ANSWER ONLY]
- Major costs
- Moderate costs
- Minor costs
- No costs
- Don’t know [SPONTANEOUS]
b. And in terms of benefits?
[READ OUT, ONE ANSWER ONLY]
- Major benefits
- Moderate benefits
- Minor benefits
- No benefits
- Don’t know [SPONTANEOUS]
[ASK IF ANY RESPONSE major, moderator or minor costs]
Q13. You indicated that a change in legislation would have an impact on the
costs of your company. Can you please elaborate? How would the legislative
change impact the costs of your company? Which costs would change?
[OPEN-ENDED RESPONSE]
[ASK ALL]
Q14. Are there any of the mentioned legislative changes that you would in
particular favour or disfavour? Why?
[OPEN-ENDED RESPONSE]
[ASK ALL]
Q15. What would be the overall impact of fully harmonising the EU rules, i.e.
creating a uniform set of rules in the whole EU, on the retail sector in your
country and in the EU? Please indicate the extent to which you agree or
disagree with the following statements.
[READ OUT, ONE ANSWER PER STATEMENT]
- Strongly agree
- Agree
- Neither agree or disagree
- Disagree
- Strongly disagree
- Don’t know [SPONTANEOUS]
a. A single set of rules will increase competition in the retail sector in the EU
b. A single set of rules will increase competition in our domestic market from
retailers based in other EU countries
c. A single set of rules will result in lower prices for consumers
d. A single set of rules will lead to reduced margins for retailers
e. The increase in the reversal of the burden of proof period (i.e. sellers must
prove that the item was not defective for the entire duration of the legal
guarantee) will increase the quality and durability of goods
126
f. The reduction in the legal guarantee period in countries that now have a longer
period will reduce the quality and durability of goods in these countries.
127
Annex 5 Additional data tables for business interviews
The tables provided below present more detailed information about the business interviews (see also Annex 3).
Table A5.1 Responses base by sector and Member State
Sector Value All AT BG FI FR DE EL HU LU NL PL PT RO ES SE UK
Clothing,
footwear and
accessories
Count 80 5 7 7 6 5 11 5 11 7 3 8 3 2 10 3
Colum
n N %
21% 18% 23% 26% 29% 20% 42% 19% 65% 28% 11% 26% 11% 8% 40% 27%
Beauty, health
and wellness
Count 44 4 7 5 4 2 4 0 0 2 3 3 3 4 5 3
Colum
n N %
12% 14% 23% 19% 19% 8% 15% 0% 0% 8% 11% 10% 11% 15% 20% 27%
Entertainment -
books,
magazines,
Vinyl, CDs/
DVDs (movies,
music, games)
Count 28 1 0 1 3 1 1 1 4 7 1 1 2 3 1 4
Colum
n N %
7% 4% 0% 4% 14% 4% 4% 4% 24% 28% 4% 3% 7% 12% 4% 36%
Sports and
outdoors
Count 29 4 2 2 1 0 0 4 3 4 1 1 0 1 5 1
Colum
n N %
8% 14% 6% 7% 5% 0% 0% 15% 18% 16% 4% 3% 0% 4% 20% 9%
Toys Count 21 0 3 2 0 2 0 1 2 3 3 2 0 0 1 2
Colum
n N %
6% 0% 10% 7% 0% 8% 0% 4% 12% 12% 11% 6% 0% 0% 4% 18%
Electronic/
digital goods
(cameras,
laptops, gaming
consoles,
Count 36 2 1 3 1 4 2 2 1 4 3 4 1 4 1 1
Colum
n N %
10% 7% 3% 11% 5% 16% 8% 8% 6% 16% 11% 13% 4% 15% 4% 9%
128
Sector Value All AT BG FI FR DE EL HU LU NL PL PT RO ES SE UK
mobile phones,
tablets etc.)
Small
household
appliances (e.g.
toasters,
kettles, etc.)
Count 24 2 3 3 0 2 2 3 0 2 2 1 1 3 0 1
Colum
n N %
6% 7% 10% 11% 0% 8% 8% 12% 0% 8% 7% 3% 4% 12% 0% 9%
Large
household
appliances (e.g.
dish washers,
washing
machines, etc.)
Count 19 1 0 2 1 2 3 0 0 1 1 2 0 3 2 1
Colum
n N %
5% 4% 0% 7% 5% 8% 12% 0% 0% 4% 4% 6% 0% 12% 8% 9%
Furniture,
furnishings and
decoration
(including do-it-
yourself goods
and
maintenance
products)
Count 60 1 4 8 6 7 8 4 3 8 7 10 10 2 9 5
Colum
n N %
16% 4% 13% 30% 29% 28% 31% 15% 18% 32% 25% 32% 36% 8% 36% 45%
Cars,
motorbikes,
bikes or parts
Count 87 7 8 15 2 6 4 9 2 6 8 7 12 5 4 2
Colum
n N %
23% 25% 26% 56% 10% 24% 15% 35% 12% 24% 29% 23% 43% 19% 16% 18%
Other products Count 21 0 4 1 1 1 0 1 1 2 1 3 1 1 1 3
Colum
n N %
6% 0% 13% 4% 5% 4% 0% 4% 6% 8% 4% 10% 4% 4% 4% 27%
Total Count 375 28 31 27 21 25 26 26 17 25 28 31 28 26 25 11
129
Table A5.2 Q6. Do you require consumers to prove that the defect (including a lack of quality or performance feature) existed at the time
of delivery before offering them a remedy?
Sales channel Cross-border sales Size (Employees)
Cost scale Value
All
countri
es
Only face-
to-face
Only
distance
sales Both Yes
No, we
only sell
domestica
lly, i.e. in
one EU
country
0-9
employe
es
10-49
employe
es
50-250
employe
es
Yes, always Count 115 71 6 36 24 91 59 47 9
Column N
%
31% 32% 30% 28% 24% 33% 32% 31% 24%
Yes, but only
after six
months from
the delivery
Count 31 24 1 6 8 23 18 12 1
Column N
%
8% 11% 5% 5% 8% 8% 10% 8% 3%
Yes, but only
after one
year from
the delivery
Count 4 3 0 1 0 4 1 3 0
Column N
%
1% 1% % 1% % 1% 1% 2% %
Yes, but only
after 2 years
from the
delivery
Count 1 0 0 1 1 0 0 1 0
Column N
%
% % % 1% 1% % % 1% %
No, not if
they are
loyal/known
customers
Count 20 18 0 2 3 17 13 6 1
Column N
%
5% 8% % 2% 3% 6% 7% 4% 3%
No, we usually
do not ask for
Count 173 95 10 67 56 117 78 73 22
Column N 46% 43% 50% 52% 57% 42% 42% 48% 58%
130
Sales channel Cross-border sales Size (Employees)
Cost scale Value
All
countri
es
Only face-
to-face
Only
distance
sales Both Yes
No, we
only sell
domestica
lly, i.e. in
one EU
country
0-9
employe
es
10-49
employe
es
50-250
employe
es
this proof %
Other, please
specify
Count 24 8 2 13 6 18 11 8 5
Column N
%
6% 4% 10% 10% 6% 6% 6% 5% 13%
Don't know Count 7 3 1 3 0 7 4 3 0
Column N
%
2% 1% 5% 2% % 3% 2% 2% %
Total Count 375 222 20 129 98 277 184 153 38
Column N
%
100% 100% 100% 100% 100% 100% 100% 100% 100%
Table A5.3 Q7. In the last 24 months, approximately how many instances of the following issues has your company encountered? Please
provide the absolute number.
Question Value All AT BG FI FR DE EL HU LU NL PL PT RO ES SE UK
# of issues FtF:
Customer
complaints
regarding faulty
goods (requesting
remedies (repair,
Mean 104 471 65 264 12 90 26 52 48 179 120 10 10 36 97 8
Median 5 5 4 10 3 8 5 1 5 10 2 2 3 30 18 5
Minimum 2 4 2
Maximu
m
10,0
00
10,0
00
750 3,00
0
100 500 200 350 300 1,00
0
2,00
0
100 100 100 730 20
131
Question Value All AT BG FI FR DE EL HU LU NL PL PT RO ES SE UK
replacement,
refund, price
reduction etc.)
under the legal
guarantee)
Valid N 317 24 27 24 18 18 25 23 15 19 21 28 26 21 20 8
Missing 58 4 4 3 3 7 1 3 2 6 7 3 2 5 5 3
# of issues
distance:
Customer
complaints
regarding faulty
goods (requesting
remedies (repair,
replacement,
refund, price
reduction etc.)
under the legal
Mean 17 6 114 3 17 4 4 13 43 14 8 1 6 24 3
Median 1 5 40 3 3 1 1 3 1 2 10 2
Minimum
Maximu
m
500 15 500 20 100 10 20 90 288 80 50 6 20 150 7
Valid N 128 4 6 15 8 6 8 11 6 13 8 7 14 5 12 5
Missing 247 24 25 12 13 19 18 15 11 12 20 24 14 21 13 6
# of issues
distance CB:
Customer
complaints
regarding faulty
goods (requesting
remedies (repair,
replacement,
refund, price
reduction etc.)
under the legal
guarantee)
Mean 2 3 4 6 3 1 1 . 7 2
Median 4 3 1 1 .
Minimum 4 .
Maximu
m
30 10 4 30 5 2 1 1 . 20 10
Valid N 48 3 1 2 5 4 2 3 6 4 4 4 3 5 2
Missing 327 25 30 25 16 21 24 23 11 21 24 27 28 23 20 9
# of issues FtF:
Complaints
regarding other
issues not
Mean 51 179 3 345 8 41 4 10 5 36 3 8 9 13 51 7
Median 1 10 4 1 7 1 1 5 6 6
Minimum
132
Question Value All AT BG FI FR DE EL HU LU NL PL PT RO ES SE UK
covered by the
legal guarantee Maximu
m
5,00
0
4,00
0
30 5,00
0
120 500 50 50 40 450 30 100 100 50 365 20
Valid N 313 26 31 22 18 19 26 22 15 18 18 29 25 18 18 8
Missing 62 2 5 3 6 4 2 7 10 2 3 8 7 3
# of issues
distance:
Complaints
regarding other
issues not
covered by the
legal guarantee :
Mean 5 1 4 4 5 4 3 10 3 4 6 2 15 2
Median 3 4
Minimum
Maximu
m
100 5 25 20 24 10 15 90 24 10 50 20 100 10
Valid N 125 4 8 14 8 7 9 11 6 11 7 8 13 4 10 5
Missing 250 24 23 13 13 18 17 15 11 14 21 23 15 22 15 6
# of issues
distance CB:
Complaints
regarding other
issues not
covered by the
legal guarantee :
Mean 2 2 1 1 .
Median .
Minimum .
Maximu
m
10 5 10 3 2 1 .
Valid N 47 3 1 2 5 5 2 3 6 4 4 4 2 4 2
Missing 328 25 30 25 16 20 24 23 11 21 24 27 28 24 21 9
# of issues FtF:
Your customer
thought they
were entitled to a
remedy under the
legal guarantee
Mean 17 45 6 41 5 7 41 26 11 6 10 5 5 6 10
Median 2 3 2 3
Minimum
Maximu
m
1,00
0
1,00
0
100 700 80 50 1,00
0
400 100 50 200 100 50 25 60 1
133
Question Value All AT BG FI FR DE EL HU LU NL PL PT RO ES SE UK
which your
company did not
think it was
obliged to provide
under the current
law :
Valid N 309 26 31 24 18 18 26 22 15 16 20 29 24 13 19 8
Missing 66 2 3 3 7 4 2 9 8 2 4 13 6 3
# of issues
distance: Your
customer thought
they were entitled
to a remedy
under the legal
guarantee which
your company did
not think it was
obliged to provide
under the current
law :
Mean 3 3 7 8 3 7 2 1 7 7
Median 1 2
Minimum
Maximu
m
70 10 30 4 60 10 1 70 12 3 50 5 60
Valid N 125 4 8 15 8 7 9 11 5 12 6 7 13 4 11 5
Missing 250 24 23 12 13 18 17 15 12 13 22 24 15 22 14 6
# of issues
distance CB: Your
customer thought
they were entitled
to a remedy
under the legal
guarantee which
your company did
not think it was
obliged to provide
under the current
law :
Mean 3 1 . 1
Median .
Minimum .
Maximu
m
10 10 1 3 1 . 3
Valid N 48 3 1 2 5 5 2 3 6 4 4 4 2 5 2
Missing 327 25 30 25 16 20 24 23 11 21 24 27 28 24 20 9
134
Table A5.4 Q8: Cost of compliance by sales channel, engagement in cross border activity and size of business, responses by sales
channel and company size (employees)
Sales channel Cross-border sales Size (Employees)
Cost scale Value
All
countr
ies
Only face-
to-face
Only
distance
sales Both Yes
No, we
only sell
domestic
ally, i.e.
in one
EU
country
0-9
empl
oyee
s
10-49
emplo
yees
50-250
employ
ees
Q9a: Legal
guarantee
period longer
than 2 years
Major costs Count 21 8 1 12 7 14 9 6 6
Column N % 20% 18% 11% 23% 17% 21% 17% 16% 35%
Moderate
costs
Count 18 6 1 11 7 11 6 9 3
Column N % 17% 13% 11% 21% 17% 17% 12% 24% 18%
No
costs/benefi
ts prevail
Count 51 23 5 22 20 31 31 15 5
Column N
%
48% 51% 56% 42% 49% 47% 60% 39% 29%
Don't know Count 17 8 2 7 7 10 6 8 3
Column N % 16% 18% 22% 13% 17% 15% 12% 21% 18%
Total Count 107 45 9 52 41 66 52 38 17
Q9b: Having
to prove that
the defect did
not exist at
the time of
delivery up to
two years
after the
delivery
Major costs Count 10 3 1 6 8 2 3 4 3
Column N % 9% 5% 14% 14% 14% 4% 5% 9% 25%
Moderate
costs
Count 33 22 2 9 12 21 12 17 4
Column N % 29% 34% 29% 21% 21% 38% 22% 36% 33%
No
costs/benefi
ts prevail
Count 55 33 2 20 30 25 31 20 4
Column N 48% 52% 29% 48% 52% 45% 56% 43% 33%
135
Sales channel Cross-border sales Size (Employees)
Cost scale Value
All
countr
ies
Only face-
to-face
Only
distance
sales Both Yes
No, we
only sell
domestic
ally, i.e.
in one
EU
country
0-9
empl
oyee
s
10-49
emplo
yees
50-250
employ
ees
(instead of 6
months)
%
Don't know Count 16 6 2 7 8 8 9 6 1
Column N % 14% 9% 29% 17% 14% 14% 16% 13% 8%
Total Count 114 64 7 42 58 56 55 47 12
Q9c: No
obligation for
customers to
notify the
seller of a
defect within
2 months of
discovering it
Major costs Count 22 8 1 12 11 11 6 12 4
Column N % 11.8% 7.6% 7.7% 18.5% 12.2% 11.5% 6.7% 15.2% 22.2%
Moderate
costs
Count 46 30 3 13 17 29 19 21 6
Column N % 25% 29% 23% 20% 19% 30% 21% 27% 33%
No
costs/benefi
ts prevail
Count 94 57 5 31 51 43 48 39 7
Column N
%
51% 54% 38% 48% 57% 45% 54% 49% 39%
Don't know Count 24 10 4 9 11 13 16 7 1
Column N % 13% 10% 31% 14% 12% 14% 18% 9% 6%
Total Count 186 105 13 65 90 96 89 79 18
Q9d:
Providing free
choice of
remedies
(the
Major costs Count 24 10 1 13 8 16 6 14 4
Column N % 20% 16% 14% 25% 22% 19% 12% 25% 27%
Moderate
costs
Count 41 20 3 18 11 30 19 14 8
Column N % 34% 32% 43% 35% 30% 36% 37% 25% 53%
136
Sales channel Cross-border sales Size (Employees)
Cost scale Value
All
countr
ies
Only face-
to-face
Only
distance
sales Both Yes
No, we
only sell
domestic
ally, i.e.
in one
EU
country
0-9
empl
oyee
s
10-49
emplo
yees
50-250
employ
ees
possibility for
the consumer
to ask
directly for a
refund
instead of
first having
to ask for
repair or
replacement)
instead of a
hierarchy of
remedies
No
costs/benefi
ts prevail
Count 42 25 2 15 14 28 17 22 3
Column N
%
35% 40% 29% 29% 38% 33% 33% 40% 20%
Don't know Count 14 8 1 5 4 10 9 5 0
Column N % 12% 13% 14% 10% 11% 12% 18% 9% 0%
Total Count 121 63 7 51 37 84 51 55 15
Source: Ipsos business interviews
Table A5.5 Q8: Cost of compliance by sales channel, engagement in cross border activity and size of business, responses by Member
State
Question Cost
/ben
efits
Type All AT BG FI FR DE EL HU LU NL PL PT RO ES SE UK
Q9a. Cost of:
Legal guarantee
period longer
than 2 years
Major
costs
Count 21 0 0 8 0 0 1 0 0 7 1 0 0 1 3 0
Column N
%
20% 0% 0% 30% 0% 0% 100
%
0% 0% 28% 17% 0% 0% 33% 12% 0%
Mode Count 18 0 0 4 2 0 0 0 0 2 1 0 0 1 6 2
137
Question Cost
/ben
efits
Type All AT BG FI FR DE EL HU LU NL PL PT RO ES SE UK
rate
costs Column N
%
17% 0% 0% 15% 100
%
0% 0% 0% 0% 8% 17% 0% 0% 33% 24% 18%
No
costs
/bene
fits
preva
il
Count 51 3 1 15 0 1 0 0 1 10 3 0 0 1 11 5
Column N
%
48% 100
%
100
%
56% 0% 100
%
0% 0% 100
%
40% 50% 0% 0% 33% 44% 45%
Don’t
know
Count 17 0 0 0 0 0 0 0 0 6 1 1 0 0 5 4
Column N
%
16% 0% 0% 0% 0% 0% 0% 0% 0% 24% 17% 100
%
0% 0% 20% 36%
Total Count 107 3 1 27 2 1 1 0 1 25 6 1 0 3 25 11
Column N
%
100
%
100
%
100
%
100
%
100
%
100
%
100
%
% 100
%
100
%
100
%
100
%
0% 100
%
100
%
100
%
Q9b. Cost of:
Having to prove
that the defect
did not exist at
the time of
delivery up to
two years after
the delivery
(instead of 6
months)
Major
costs
Count 10 1 0 0 0 1 1 0 0 2 4 0 0 1 0 0
Column N
%
9% 20% 0% 0% 0% 20% 100
%
% 0% 67% 14% 0% 0% 25% 0% 0%
Mode
rate
costs
Count 33 1 0 0 6 2 0 1 1 0 8 13 0 1 0 0
Column N
%
29% 20% 0% 0% 29% 40% 0% 33% 10% 0% 29% 42% 0% 25% 0% 0%
No
costs
/bene
fits
preva
il
Count 55 3 0 0 14 1 0 1 8 1 6 17 0 2 2 0
Column N
%
48% 60% 0% 0% 67% 20% 0% 33% 80% 33% 21% 55% 0% 50% 100
%
0%
138
Question Cost
/ben
efits
Type All AT BG FI FR DE EL HU LU NL PL PT RO ES SE UK
Don’t
know
Count 16 0 0 0 1 1 0 1 1 0 10 1 0 0 0 1
Column N
%
14% 0% 0% 0% 5% 20% 0% 33% 10% 0% 36% 3% 0% 0% 0% 100
%
Total Count 114 5 0 0 21 5 1 3 10 3 28 31 0 4 2 1
Column N
%
100
%
100
%
0% 0% 100
%
100
%
100
%
100
%
100
%
100
%
100
%
100
%
0% 100
%
100
%
100
%
Q9c. Cost of: No
obligation for
customers to
notify the seller
of a defect
within 2 months
of discovering it
Major
costs
Count 22 3 0 0 0 4 7 1 0 1 5 0 0 1 0 0
Column N
%
12% 11% 0% 0% 0% 16% 27% 25% % 14% 18% 0% 0% 25% 0% 0%
Mode
rate
costs
Count 46 6 0 1 5 8 8 0 2 2 6 0 0 1 3 4
Column N
%
25% 21% 0% 50% 24% 32% 31% % 12% 29% 21% 0% 0% 25% 43% 36%
No
costs
/bene
fits
preva
il
Count 94 18 2 1 14 12 7 3 13 3 8 3 0 2 3 5
Column N
%
51% 64% 100
%
50% 67% 48% 27% 75% 76% 43% 29% 75% 0% 50% 43% 45%
Don’t
know
Count 24 1 0 0 2 1 4 0 2 1 9 1 0 0 1 2
Column N
%
13% 4% 0% 0% 10% 4% 15% 0% 12% 14% 32% 25% 0% 0% 14% 18%
Total Count 186 28 2 2 21 25 26 4 17 7 28 4 0 4 7 11
Column N
%
100
%
100
%
100
%
100
%
100
%
100
%
100
%
100
%
100
%
100
%
100
%
100
%
0% 100
%
100
%
100
%
139
Question Cost
/ben
efits
Type All AT BG FI FR DE EL HU LU NL PL PT RO ES SE UK
Q9d. Cost of:
Providing free
choice of
remedies (the
possibility for
the consumer to
ask directly for a
refund instead
of first having to
ask for repair or
replacement)
instead of a
hierarchy of
remedies
Major
costs
Count 24 0 0 0 0 1 11 1 0 2 1 4 1 1 0 2
Column N
%
20% 0% 0% 0% 0% 33% 42% 50% 0% 100
%
25% 13% 4% 33% 0% 18%
Mode
rate
costs
Count 41 0 0 0 2 0 4 1 0 0 3 10 16 1 2 2
Column N
%
34% 0% 0% 0% 50% 0% 15% 50% 0% 0% 75% 32% 57% 33% 100
%
18%
No
costs
/bene
fits
preva
il
Count 42 1 3 0 2 2 7 0 0 0 0 16 5 1 0 5
Column N
%
35% 100
%
100
%
0% 50% 67% 27% 0% 0% 0% 0% 52% 18% 33% 0% 45%
Don’t
know
Count 14 0 0 0 0 0 4 0 1 0 0 1 6 0 0 2
Column N
%
12% 0% 0% 0% 0% 0% 15% 0% 100
%
0% 0% 3% 21% 0% 0% 18%
Total Count 121 1 3 0 4 3 26 2 1 2 4 31 28 3 2 11
Column N
%
100
%
100
%
100
%
0% 100
%
100
%
100
%
100
%
100
%
100
%
100
%
100
%
100
%
100
%
100
%
100
%
140
Table A5.6 Q9: In most EU countries, the legal guarantee period is two years. However, in some EU countries, the legal guarantee period
is currently longer than 2 years or unlimited. What would be the impact on your business if a uniform legal guarantee period
of two years were to be introduced for distance sales (e-commerce, mail order etc.) and face-to-face sales (bricks and mortar
shops etc.), instead of a situation where there is a uniform two-year guarantee period only for distance sales, but different
rules would apply to products sold face-to-face?
Costs Value All
countri
es
Sales channel Cross-border
sales
Size (Employees)
Only
face-
to-face
Only
distanc
e sales
Both Yes No
0-9
employ
ees
10-49
employ
ees
50-250
employ
ees
Lower costs through simpler regime
(same rules across the EU for face-to-
face and distance sales)
Count 47 30 0 17 12 35 18 22 7
Column N
%
13% 14% 0% 13% 14% 13% 11% 15% 18%
Fairer competition between retailers
selling face-to-face and retailers
selling by way of distance
communication (e-commerce, mail
order etc.)
Count 75 52 0 23 15 60 35 30 10
Column N
%
21% 23% 0% 18% 18% 23% 21% 20% 26%
No impact. The fact that different
rules would apply to products
purchased by way of distance
communication as opposed to face-
to-face sales does not matter.
Count 205 126 0 79 51 154 96 89 20
Column N
%
58% 57% 0% 61% 60% 58% 59% 60% 53%
Other
Count 24 14 0 10 7 17 13 8 3
Column N
%
7% 6% 0% 8% 8% 6% 8% 5% 8%
Don't know
Count 23 14 0 9 4 19 13 8 2
Column N
%
7% 6% 0% 7% 5% 7% 8% 5% 5%
141
Costs Value All
countri
es
Sales channel Cross-border
sales
Size (Employees)
Only
face-
to-face
Only
distanc
e sales
Both Yes No
0-9
employ
ees
10-49
employ
ees
50-250
employ
ees
Total Count 351 222 0 129 85 266 164 149 38
Table A5.7 Q10: What would be the impact on your business if a period of reversal of burden of proof of 2 years were to be introduced in
all EU countries, so that the seller must prove that the item was not defective at the time of delivery during this 2-year
period?
Questio
n
Costs Value All
countrie
s
Sales channel Cross-border sales Size (Employees)
Only face-
to-face
Only
distance
sales
Both Yes No
0-9
employe
es
10-49
employe
es
50-250
employe
es
COST:
Period of
reversal
of burden
of proof
of 2
years
were to
be
introduce
d in all
EU
countries
?
Major
costs
Count 121 59 7 54 38 83 45 58 18
Column
N %
32% 27% 35% 42% 39% 30% 24% 38% 47%
Moderate
costs
Count 73 46 3 23 16 57 35 31 7
Column
N %
19% 21% 15% 18% 16% 21% 19% 20% 18%
Minor co
sts
Count 55 37 2 16 13 42 28 21 6
Column
N %
15% 17% 10% 12% 13% 15% 15% 14% 16%
No costs
Count 99 62 8 28 26 73 59 35 5
Column
N %
26% 28% 40% 22% 27% 26% 32% 23% 13%
Don't Count 27 18 0 8 5 22 17 8 2
142
Questio
n
Costs Value All
countrie
s
Sales channel Cross-border sales Size (Employees)
Only face-
to-face
Only
distance
sales
Both Yes No
0-9
employe
es
10-49
employe
es
50-250
employe
es
know Column
N %
7% 8% % 6% 5% 8% 9% 5% 5%
Total
Count 375 222 20 129 98 277 184 153 38
Column
N %
100% 100% 100% 100% 100% 100% 100% 100% 100%
BENEFIT
S:
Period of
reversal
of burden
of proof
of 2
years
were to
be
introduce
d in all
EU
countries
?
Major
benefits
Count 21 9 3 8 7 14 14 6 1
Column
N %
6% 4% 15% 6% 7% 5% 8% 4% 3%
Moderate
benefits
Count 36 26 1 8 7 29 20 13 3
Column
N %
10% 12% 5% 6% 7% 10% 11% 8% 8%
Minor be
nefits
Count 64 36 1 27 13 51 30 27 7
Column
N %
17% 16% 5% 21% 13% 18% 16% 18% 18%
No
benefits
Column
N %
230 133 15 81 65 165 108 98 24
Count 61% 60% 75% 63% 66% 60% 59% 64% 63%
143
Questio
n
Costs Value All
countrie
s
Sales channel Cross-border sales Size (Employees)
Only face-
to-face
Only
distance
sales
Both Yes No
0-9
employe
es
10-49
employe
es
50-250
employe
es
Don't
know
Column
N %
24 18 0 5 6 18 12 9 3
Count 6% 8% % 4% 6% 6% 7% 6% 8%
Total Column
N %
375 222 20 129 98 277 184 153 38
Count
100% 100% 100% 100% 100% 100% 100% 100% 100%
Table A5.8 Q11a: Would you consider it fair if consumers had the opportunity to ask for a full refund?
Answer Value All
countries
Sales channel Cross-border sales Size (employees)
Only
face-to-
face
Only
distance
sales Both Yes No
0-9
employe
es
10-49
employe
es
50-250
employe
es
Yes Count 221 136 14 69 52 169 121 82 18
Column N
%
59% 61% 70% 53% 53% 61% 66% 54% 47%
No Count 137 76 6 54 41 96 55 64 18
Column N
%
37% 34% 30% 42% 42% 35% 30% 42% 47%
144
Answer Value All
countries
Sales channel Cross-border sales Size (employees)
Only
face-to-
face
Only
distance
sales Both Yes No
0-9
employe
es
10-49
employe
es
50-250
employe
es
Don’t know Count 17 10 0 6 5 12 8 7 2
Column N
%
5% 5% % 5% 5% 4% 4% 5% 5%
Total Count 375 222 20 129 98 277 184 153 38
Column N
%
100% 100% 100% 100% 100% 100% 100% 100% 100%
Table A5.9 Q12: Overview of reported costs and benefits if consumer would no longer be obliged to inform the seller of a defect within
two months of discovering it, by sales channel
Questio
n
Costs Value All
countrie
s
Sales channel Cross-border sales Size (Employees)
Only face-
to-face
Only
distance
sales
Both Yes No
0-9
employe
es
10-49
employe
es
50-250
employe
es
COST:
consume
rs would
no longer
be
obliged
to inform
the seller
of a
defect
within
Major
costs
Count 109 52 5 52 35 74 40 56 13
Column
N %
29% 23% 25% 40% 36% 27% 22% 37% 34%
Moderate
costs
Count 57 33 3 19 11 46 28 21 8
Column
N %
15% 15% 15% 15% 11% 17% 15% 14% 21%
Minor co
sts
Count 63 36 5 22 16 47 35 23 5
Column
N %
17% 16% 25% 17% 16% 17% 19% 15% 13%
145
Questio
n
Costs Value All
countrie
s
Sales channel Cross-border sales Size (Employees)
Only face-
to-face
Only
distance
sales
Both Yes No
0-9
employe
es
10-49
employe
es
50-250
employe
es
two
months
of
discoveri
ng it?
No costs
Count 113 77 5 30 30 83 64 39 10
Column
N %
30% 35% 25% 23% 31% 30% 35% 25% 26%
Don't
know
Count 33 24 2 6 6 27 17 14 2
Column
N %
9% 11% 10% 5% 6% 10% 9% 9% 5%
Total
Count 375 222 20 129 98 277 184 153 38
Column
N %
100% 100% 100% 100% 100% 100% 100% 100% 100%
BENEFIT
S:
consume
rs would
no longer
be
obliged
Major
benefits
Count 16 13 0 3 3 13 9 7 0
Column
N %
4% 6% % 2% 3% 5% 5% 5% %
Moderate
benefits
Count 28 15 2 10 10 18 15 9 4
Column
N %
7% 7% 10% 8% 10% 6% 8% 6% 11%
146
Questio
n
Costs Value All
countrie
s
Sales channel Cross-border sales Size (Employees)
Only face-
to-face
Only
distance
sales
Both Yes No
0-9
employe
es
10-49
employe
es
50-250
employe
es
to inform
the seller
of a
defect
within
two
months
of
discoveri
ng it
Minor be
nefits
Count 42 26 1 15 9 33 20 19 3
Column
N %
11% 12% 5% 12% 9% 12% 11% 12% 8%
No
benefits
Column
N %
258 147 16 93 70 188 127 103 28
Count 69% 66% 80% 72% 71% 68% 69% 67% 74%
Don't
know
Column
N %
31 21 1 8 6 25 13 15 3
Count 8% 9% 5% 6% 6% 9% 7% 10% 8%
Total Column
N %
375 222 20 129 98 277 184 153 38
Count
100% 100% 100% 100% 100% 100% 100% 100% 100%
147
Table A5.10 Q13. You indicated that a change in legislation would have an impact on the costs of your company. Can you please
elaborate? How would the legislative change impact the costs of your company? Which costs would change?
Member
State
Main responses
Austria ■ Main costs likely to ensue: accounting fees, consulting fees, staff costs, delivery costs, potential legal costs (resulting
from disputes/court action), storage costs (from having to stock more products)
These costs would likely be brought about as a result of:
(1) Increased bureaucracy (n=3)
(2) Increased number of complaints/number of requests for repairs or replacement/increased potential for legal actions
(n=8):
"The number of repairs would increase. We would have to face additional costs because we are not the producers, we
only sell the products"
"I am totally against it because of the provability issue. Legal costs would thus be generated which I will have to take
over. I can't supervise the customers to see how they treat the products."
"In the fashion sector, it would be impossible. We will thus have more cases of complaints. This results in us having
more products in stock. You can't sell them anymore. You can't determine a guarantee period for clothing. Of course, it
depends on how the consumers treat the products."
(3) Longer working hours: these would be driven from an increase in the number of requests for repairs or
replacement. As a result staff would have to work longer to meet customer demand (n=4)
No change/negligible costs (n=7)
Other potential impacts: increase in prices (n=4)
"If the guarantee period is extended, our products will be mistreated. Most products have a long durability. But we
can't give a guarantee of more than two years for every product. On the other hand, the manufacturers would offer
a better quality, and this will provoke a price increase."
Bulgaria Typical costs that are likely to ensue include: tax, legal fees (n=3), additional staff costs (n=2)
"Servicing products under guarantee requires additional staff - [which would result in] a more expensive product
and less demand."
148
Member
State
Main responses
No change/negligible impacts (n=1)
For many retailers, the impact of extending sales guarantees is highly uncertain (n=15). According to some retailers
(n=3), the scale of impacts will be dependent on the length of the extension period - the longer it is, the more
significant will costs be. These retailers believe that guarantees should last at most a year, with a few retailers
(n=2) indicating that ideally, it should be about three months.
Increased number of complaints resulting in an increasing number of requests for repairs/replacement (n=3)
Potential increase in prices (n=1)
Finland Some retailers are unsure as to what the impact is likely to be in the event of an extension, though they agree that
there will be additional costs involved (n=4)
"Costs would increase in some cases. I can't specify which ones."
Many retailers believe that the most significant costs entailed by the legislative change are likely to be:
(1) Staff costs - largely brought about by an increase in business activity which would, in turn, be the result of an
increase in the number of complaints / requests for repairs or replacement (n=7)
"Additional working time would have to be spent, meaning personnel costs would increase"
(2) Costs associated with repairs (n=8)
(3) Other business costs (e.g. freight costs, compensation, other variable costs, such as telephone expenses,
postage, shipping, cost of material (e.g. spare parts)) (n=8)
Potential increase in prices (n=1)
France Most retailers surveyed were unsure of the likely impacts of the legislative change (n=11)
A few retailers however envisage important financial impacts resulting from a higher number of requests for repairs
or replacement (n=2)
"If durations are extended, the risk is that the customer can take his product for free."
Other potential costs:
(1) additional personnel / staff costs resulting from increased after-sales services or management of an increasing
number of complaints or requests for repairs/replacement (n=2)
"You need additional staff to manage this (30,000 euros/year)."
(2) costs associated with repairs (n=2)
(3) shipping/transport costs (n=1)
(4) storage costs (n=1)
149
Member
State
Main responses
(5) No costs (n=1)
Germany Most retailers believe that the change in legislation would entail significant administrative/business costs, notably:
(1) Delivery/postage/shipping/transport costs (n=9)
(2) Costs associated with sourcing additional raw material/spare parts (n=2)
(3) Storage costs - retailers are likely to stock more products requiring additional storage space (n=2)
(4) Costs associated with repairs (n=5)
"It depends on how the legislation would change. We must accept the return of products, but if the manufacturer is
not liable to pay back the damage to us, then these would be additional costs for our company."
"In my opinion, if the customers had the right to ask for a full refund, there would be very little production and a lot
of repairs."
(5) Staff costs (n=7)
Increase in prices/reduced profit margins (n=2)
"Manufacturers will aim to offer better quality. The products will become increasingly expensive [...]"
Some retailers (n=4) were unsure about how the legislative change would impact on their business. Conversely, a
few retailers (n=2) envisaged little or no change.
Greece Most of the retailers surveyed do not foresee significant costs from the legislative change (n=7)
"COSTS (ALBEIT SMALL) WOULD BE INCURRED IF THE WARRANTY PERIOD WERE TO INCREASE, BECAUSE THE
COMPANY WOULD BE FORCED TO COVER MORE CASES OF FAULTY PRODUCTS"
"WE WOULD PREFER IT IF NO CHANGES WERE MADE TO THE CURRENT ARRANGEMENTS, BUT IN ANY CASE, WE
WILL INCUR MODERATE COSTS"
Some retailers envisaged significant costs from the change in legislation (n=7). One retailer indicated that costs are
likely to double while another retailer indicated that costs would be "high and unbearable" owing to the seasonable
nature of the products sold. For others, (n=3) this increase in costs would mostly result from the misuse of
guarantees by consumers.
"THE PERIOD IS TOO LONG AND CONSUMERS WILL MISUSE THIS RIGHT, MEANING THAT COSTS WILL BE
MAXIMISED"
Some retailers (n=2) also expect staff costs to increase owing to the increase in working time required to address
customer complaints or requests for repairs/replacement.
Some retailers were not able to provide an indication of the scale of impacts engendered by the change in legislation
150
Member
State
Main responses
(n=5).
Other costs likely to ensue (n=2): (1) storage costs; (2) shipping/transport costs
Hungary Some retailers were unsure about the potential impacts of the regulatory change, though the general consensus was
that costs are likely to increase (n=6)
For a few retailers, the change in legislation is unlikely to result in significant impacts or costs for their business
(n=2)
"These changes would be of minimal effect, we deal with complaints anyway. Guarantee-related costs are nothing
compared to marketing costs, for instance [...]."
Many retailers envisage important business costs, notably in the form of: (1) repair costs, including cost of raw
material/spare parts (n=4); (2) shipping expenses (n=1); (3) administrative costs, such as telephone expenses or
other costs associated with increased correspondence with manufacturers (n=1); (4) storage costs (n=1); (5) costs
associated with a change in business processes (n=1); (6) costs associated with unused stock/wastage (n=2).
Another important impact includes additional staff cost (n=6), especially owing to the recruitment of experts to help
resolve disputes.
"Due to the legislative changes, the customers would be able to bring back products for a longer time, and we would
need to hire an expert to determine if they were used for their intended purpose, which would mean high costs for
us."
"We would need to hire a separate person for consumer protection debates and for communicating between the
manufacturer and the consumer."
A few retailers (n=2) raised concerns about the legislative change causing a lack of level playing field across
retailers, especially between local retailers and foreign multinationals
"The competition conditions differ, therefore a multinational company is free from paying taxes and duties and
doesn’t have to comply with the consumer protection laws [...]. They are thus likely to ignore the legislative
changes which will prove unfavourable to us."
Another foreseeable impact includes increased prices (n=1)
"The prices of spare parts would increase remarkably, which would result in higher prices for the consumers."
Luxembourg Some retailers were unsure about the potential impacts of the regulatory change (n=5).
For a few retailers, the change in legislation is unlikely to result in significant impacts or costs for their business
(n=2).
151
Member
State
Main responses
Some retailers believed that the legislative change would bring about an increase in costs associated with delivery,
transport, raw materials, and storage (n=2).
Other important costs likely to ensue include additional staff costs from increased working time or increased
personnel to deal with logistics arounds returns/repairs (n=2).
Some retailers (n=4) felt that additional costs would be borne from an increased number of requests for repairs -
one retailer estimated that costs would amount to about €20,000 per year (on the basis that the business deals with
15 returns each year) while another retailer estimated a 2 per cent increase in costs.
Netherlands For some retailers (n=3), the regulatory change is likely to entail additional staff costs.
In addition, one retailer feared that the proposed legislative change will give rise to abuse on the part of consumers,
resulting in conflict and unnecessary legal action which would further add to costs.
"[...]. By placing all kinds of [...] rights with the customer, too much power goes to one particular party. [...]."
Little or no change was foreseen by a few retailers (n=2)
For some retailers, the proposed change would impose an undue burden on their business, both in terms of cost and
time (n=3)
For many retailers (n=10), additional costs incurred would mainly be in the form of shipping/transport costs; repair
costs; storage costs (especially associated with unused stock); material costs.
Poland For some retailers, the proposed legislative change would not present significant costs (n=5)
A few retailers felt that the change would increase potential for abuse on the part of consumers. They thus foresee
an increase in the number of conflicts/disputes, along with an increase in legal/court action (n=2)
"Everything would come down to litigation. Instead of working and bringing profits, the company would be in court
all the time. Lengthy proceedings, bad judicial decisions - would make running a business in this industry virtually
impossible."
Some retailers (n=3) also felt that the regulatory change would entail significant transport/shipping costs owing to
the increase in customer complaints/returns
In the same vein, more requests for repairs or replacement would require that retailers stock more products in order
to meet customer demand. This could entail considerable storage costs (n=3)
To address an increasing number of requests for repairs / replacement, a few retailers envisage that additional
personnel will be needed or existing personnel would have to work longer hours which would present additional
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State
Main responses
costs to the business (n=2).
Portugal Many retailers envisage significant costs from the proposed change (n=9). These retailers did not provide extensive
detail as to what these costs would be and how they would be brought about.
A few retailers were unsure about the nature and scale of potential impacts (n=5).
Some retailers also felt that these changes are likely to spur action on the part of manufacturers who would seek to
improve the quality of products. This in turn is likely to be reflected in higher prices for consumers (n=5).
Other potential impacts commonly reported by retailers include: (1) shipping / delivery costs associated with
sending products to manufacturers; (2) additional staff costs; (3) administrative/business costs, such as legal fees;
(4) cost of spare parts/raw materials (n=6).
Romania Many retailers felt that the proposed change would bring about significant costs mostly due to an increase in the
number of requests for refunds (n=9)
Some retailers also envisaged an increase in the number of requests for repairs which would in turn result into
higher transportation costs (n=4)
Some retailers indicated that an inevitable outcome of the regulatory change would be to take on additional staff
which would present additional and potentially significant costs for their business (n=3)
"[...] a change in legislation would imply an increase of the expenses related to the wages and the hiring of people,
who would repair the products under guarantee"
A few retailers also reported that the change would necessitate changes to internal processes - such as
documentation to staff but also to customers - (n= 2)
Other business costs may ensue, such as costs associated with product verification, legal expertise, etc. (n=2)
Some retailers do not however envisage direct major impacts from the regulatory change (n=2) while a few others
were uncertain about potential impacts engendered by the change (n=3)
Spain Most retailers surveyed felt that the change would require them to take on additional staff or work longer hours
which would impose substantial costs (n=10).
Some retailers indicated that costs associated with an increase in the number of returns/repairs are likely to be
substantial (n=4)."The more favourable consumer rights, the more compensation options. More refunds, more
costs."
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Member
State
Main responses
Other costs retailers envisage incurring include: (1) storage costs (as a result of an increase in stock) (n=3); (2)
shipping costs.
There was still some uncertainty around the potential impacts of the change. Some retailers were unable to estimate
impacts on costs (n=4).
Sweden A few retailers (n=4) were unsure about how the regulatory change would impact on their business.
For a few others (n=4), the change is not expected to have any major repercussions on the business.
Many retailers raised concerns about consumers potentially delaying requests for repairs or replacement. This in
turn is likely to result in increased costs over time as retailers may have to spend more time sourcing the relevant
spare parts or replacement product. In addition, over time, it becomes increasingly difficult for retailers to put
through requests for refunds to manufacturers. Moreover, the sooner a product is repaired the better it is. If not,
functionality of the product may further deteriorate over time which would imply that retailers have more defects to
address, adding on to costs.
"The earlier I find out a product is damaged, the less time I need to spend repairing it."
"If customers wait too long that can cause further faults and multiply the costs."
A few retailers also envisage having to work longer hours or recruit additional staff to meet an increasing number of
complaints or requests for repairs/replacement (n=2)
One retailer also envisages storage costs to increase as more products will have to be stocked and over a longer
period of time. Another retailer anticipates processing costs to increase as a result of having to handle more
requests for refunds (n=2).
Some retailers (n=3) expressed concerns about having to deal with an increasing number of disputes. They believe
that it will take time to determine whether a consumer is liable to repairs or a replacement product free-of-charge.
This would constitute an undue burden, in terms of cost and time, to retailers (n=3)
"The longer you wait the more difficult it is to prove who is responsible for the fault and then addressing it."
United
Kingdom Retailers (n= 4) generally felt that the legislative change would entail significant costs, especially in instances when
consumers do not notify them of defects in a timely fashion.
"When a customer goes away and complains 6 years later, this is a major pressure for the business in terms of
conduct, administration, record keeping, etc."
"By increasing the risk there will be more returns and that would cost in product and staff time."
One retailer was also critical of the proposed change explaining that it would disproportionately favour consumers
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State
Main responses
and encourage abuse.
"It would mean that a person's claim in a 12 month period guarantee, of a damaged clothing article, would be way
too long a period of time. The consumer simply might be tired of the clothing, there is no benefit to the retailer"
Overall
remarks
Most retailers across the 15 MS recognised that a change in legislation would entail costs for their business.
Costs would mainly accrue from an increase in the number of requests for repairs or replacement products.
As such, the shared view was that the increase in after-sales services would require businesses to take on
additional staff or increase working time to deal with these requests. Other costs commonly reported were:
administrative costs (e.g. telephone expenses from increased correspondence with manufacturers, record-
keeping), shipping/transport/delivery costs, storage costs (as a result of retailers having to stock more
goods and meet unexpected demand for new or replacement products), raw material/spare parts-related
costs.
Some retailers also envisaged substantial costs (eg. legal fees, consulting fees) arising from disputes and
court action. There were concerns that consumers may misuse guarantees/warranties in order to obtain new
products.
155
Table A5.11 Q13. You indicated that a change in legislation would have an impact on the costs of your company. Can you please
elaborate? How would the legislative change impact the costs of your company? Which costs would change?
Member
State
Main responses
Austria Most retailers (n=19) rejected the proposed extension of guarantees for various reasons, the most common ones
being:
(1) the suggested extension period is too long and would potentially not be feasible in sectors where planned
obsolescence is key or products have a limited lifespan or where products are imported from non-EU manufacturers
"[...] If the guarantee period is extended, then there would be more advantages for the consumers, but for us, the
merchants, there would actually be a lot of disadvantages. There are also products which we import from Asia, and
they don't last long. You can't give a 2-year guarantee there."
(2) the proposed change would disproportionately favour consumers
(3) the proposed change would constitute an undue burden on businesses, especially small businesses, largely
owing to additional costs incurred - e.g. increased number of repairs/refunds - and extra time and resources having
to be devoted to addressing an increased number of requests for repairs/replacement
(4) the proposed change could give rise to abuse on the part of consumers who would seek ways to obtain refunds
on many occasions
A few retailers however welcomed the change as this is how they currently operate (n=3)
Bulgaria Most retailers neither favoured nor rejected a particular legislative change (n=20)
Some retailers (n=6) were however against increasing the guarantee period beyond the two years currently in force.
Some retailers did not explain their line of reasoning while one retailer explained that such an extension could be
misused.
A few retailers (n=5) were however in favour of the legislative changes, provided that the costs are to be borne by
manufacturers (n=1) or product shelf-life is equivalent to the extended guarantee period (n=1).
Finland Most retailers (n=13) were in favour of the proposed legislative changes, especially as regards having harmonised
legislation at EU level in the area of warranties/guarantees. Additionally, some retailers felt that Finnish laws are
currently too stringent with the national legal guarantee period surpassing the European level.
"I agree, the consumer laws should be fixed in Finland as soon as possible. Too long warranty period for used
products."
"I agree with the 2-year general warranty system. The current 10-year period is way too long."
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State
Main responses
Some retailers neither favoured nor rejected a particular legislative change (n=6).
Among retailers who were against the proposed legislative changes (n=9), many retailers felt that consumers are
likely to misuse guarantees which would put manufacturers/retailers at a disadvantage. These retailers believe that
the proposed changes would entail significant costs
"All of the options sounded so bad, as they would result for more costs to the seller"
"Most of the proposals, at least the ones where the warranty period would be longer than the current one, would
only incur in additional costs to the company and not a lot of benefits. The fact that the consumer could ask for a
refund (either as soon as finding the fault, after the first repair, or after a certain period of time) would only be fair
only if the cost would go to the importer and not to the seller. Otherwise, all options would be unfair to the
company"
France Most retailers (n=13) did not express any negative or positive views in relation to the proposed changes
Few retailers were in favour of the proposed changes (n=1) explaining that any cost associated with these changes
would more likely be borne by the manufacturer
Many retailers were however against the proposed changes fearing abusive behaviour on the part of consumers and
an overcomplicated consumer landscape
"One-year guarantee for the "vise en forme" (formal defect) is already good, things shouldn't complicated further"
"That the customer claims all the time, if he's given all the possibilities to have disputes it will be heavy for
everyone, the customer has rights and so does the vendor. Boundaries shouldn't be overstepped."
Germany Most retailers did not express any negative or positive views in relation to the proposed changes (n=11).
Nonetheless, many retailers (n=10) opposed the proposed changes, in particular, the proposition to extend the legal
guarantee period in EU MS. Retailers generally felt the extension would have adverse impacts on their business. A
few retailers (n=2) explained that such a change would impose an undue burden on their business and should
therefore ensure that manufacturers are also held accountable.
"I would favour the changes mentioned if the manufacturer also had liability. Because only thus would it be secure
that our company won't have any extra costs."
"I would reject the changes. I can't prove to the consumers that the item was faultless. Longer guarantee periods
would cause us more costs."
Additionally, one retailer felt that the change would encourage abuse on the part of consumers, such that requests
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Member
State
Main responses
for replacement products or repairs will be frequent and potentially not genuine.
A few retailers (n=2) were in favour of some proposed changes but against others. These retailers did not however
indicate which of the changes they would support.
A few retailers (n=2) were in favour of the proposed changes, especially for bringing about uniform rules across EU
MS.
Greece Most retailers did not express any negative or positive views in relation to the proposed changes (n=11).
Some retailers were in favour of the proposed changes, largely for their ability to increase customer satisfaction
(n=8).
On the other hand, some retailers opposed the changes explaining that the changes would impose undue burden
and encourage an increase in fraudulent requests from customers to obtain a refund or repairs (n=6).
Hungary Many retailers did not express any negative or positive views in relation to the proposed changes (n=9).
Most retailers however opposed the changes, in particular the proposed extension of the guarantee period and the
proposed reversal of burden of proof.
"Increasing the guarantee period would be disadvantageous to us, the defect within 1-2 months of the products sold
by us is usually not a manufacturing fault. Many people bring back products with a defect caused by using in. If the
guarantee period was 3 or 5 years, there would be even more such cases."
"The reversal of burden of proof would be unfavourable to us, it would result in extra costs."
A few retailers (n=5) were however in favour of the changes but felt that the new rules should also be applicable to
manufacturers. This would allow retailers to recoup some of the costs.
"The compulsory repair period would be favourable if the repair service would have to adhere to it as well. This must
be harmonised with the seller. If the repair service takes the job with a 30-day deadline, for instance, then I, as a
retailer, should have 40 days to deliver the repaired product to the consumer. The consumer should be able to bring
the product immediately to the repair service if he/she would like to have a 30-day repair period.
Luxembourg Many retailers did not express any negative or positive views in relation to the proposed changes (n=9).
Some retailers were in favour of the proposed changes, most of them particularly praiseworthy of the increase in
customer satisfaction that is likely to result (n=5).
As many retailers however opposed the changes. These retailers particularly felt that an extension in the legal
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Member
State
Main responses
guarantee period would not be "reasonable" and entail significant costs for their business (n=5)
Netherlands Most retailers strongly opposed the proposed changes, especially changes to the legal guarantee period. Retailers
generally felt that a guarantee period exceeding the current two years would be "unreasonable." In addition, there
were concerns that consumers may misuse their new rights. (n=15)
"All uniform changes which extend the guarantee period are unfavourable as well as for the manufacturer as for us."
"Unfavourable when you give the consumers more rights, because there will also be consumers who will abuse it."
Some retailers were however indifferent to the proposed changes (n=11), unsure about what the likely changes are
likely to be.
Poland Most retailers opposed the proposed changes (n=12), especially those pertaining to an extension of the legal
guarantee period.
"I disfavour a longer guarantee period. It would generate considerable costs for the sellers."
"I think it will be very beneficial in terms of extending a warranty period and uniforming warranty. Unfortunately, it
is no longer the case when it comes to quality of use, any excuse to return an item, consumers will no longer be
held responsible for proper utilization of the goods"
A few retailers were in favour of some of the changes, in particular, the possibility of having harmonised rules at EU
level in the area of commercial sales guarantees. Additionally, some retailers are of the opinion that such changes
could increase confidence among consumers especially as regards their purchasing decisions.
"A customer will be satisfied and convinced that they have a longer warranty period and more security. They will
spend more money more boldly."
"I'm in favour of extending the warranty period for up to 3 years. [...]. But one condition must be fulfilled: the rules
must be standardized throughout the European Union: the dealer must have all the costs of repairs covered within 2
months instead of waiting for 5 months for money from the manufacturer."
Portugal A few retailers were in favour of the proposed changes, largely for increasing standardisation of rules across the EU.
Conversely, most retailers were not praiseworthy of the proposed changes (n=15). Some retailers felt that an
extension would bring additional and significant costs to their business owing to an increase in the number of
requests for repair/return/replacement.
"Guarantees over 2 years are negative because they can't be applied to every company and this one is one of those,
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Main responses
because the durability of a product lasts until it wears out."
Romania Most retailers felt indifferent about the proposed legislative changes or were unable to estimate potential impacts
associated with these changes (n=16).
On the contrary, the number of retailers who favoured the changes and those who opposed them was fairly the
same.
"I do not agree with the one stating a uniform period of guarantee that would be longer than 2 years. First of all, the
guarantee period must depend on the product because all products are different and work differently, and possible
defects appear in different ways"
"I do not support the idea of the consumer having the obligation to report a defect after 2 months, as it is very
difficult to follow the product, and if a faulty product is used for a period of 2 months, it is possible that the same
product cannot be repaired any more and there appears the obligation to replace it or to offer a refund, which would
result in further costs."
Among retailers who favoured the changes, some retailers supported the proposition to introduce a uniform legal
guarantee period for all member states of the European Union. However one retailer remarked that it would be
reasonable to "link the legal guarantee to the durability of the product, as not all products have the same duration
of life"
Spain Most retailers were against the proposed changes owing to the costs likely to be associated with the changes. Some
retailers further indicated that the changes could force them to close down (n=12). In addition, some retailers felt
that the changes were disproportionately in favour of consumers.
" It is very good to protect the consumers, but let's see who protects the intermediary, i.e. the seller. It is often us
who stand up for the manufacturer, and we have to compensate on their behalf"
A few retailers did not provide any views as regards the proposed changes. They felt they needed additional
information as to what these changes would entail (n=7)
Conversely, some retailers favoured some or most of the proposed changes. Retailers were generally content with
the idea of harmonised rules at EU level and the confidence it would bring to consumers
"In my opinion, a single regulation would simplify things a lot."
Sweden Many retailers opposed the suggested changes. Retailers were particularly concerned about the extension of the
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Member
State
Main responses
legal guarantee period but also about having to provide information to consumers about the availability of spare
parts. In general, these retailers were of the opinion that the changes would entail significant costs to their business
(n=9)
"The extended period with the reversed burden of proof is unreasonably long."
"The legislation obliging the manufacturer to provide information about actual spare parts I would particularly
disfavour."
On the other hand, some retailers were in favour of the proposed changes. They particularly welcomed the
harmonisation of legislation at EU level (n=6)
"It is positive to bring in a standardised set of regulations for a broader area; if all EU-countries have similar rules
that facilitates trade."
"[...]. Tougher rules would be good so that consumers aren't left out in the cold if their products aren't up to
scratch."
Some retailers were unsure about the impact of these changes and were therefore unable to acknowledge which of
the changes they supported or not (n=9)
United
Kingdom Retailers were generally in favour of the proposed changes. They felt that these changes could encourage
manufacturers to increase the quality and lifespan of products. Additionally, harmonised legislation would simplify
cross-border trade in their view (n=5)
"Longer uniform guarantee might require more diligence from the manufacturer, so that could be good."
"I think it may be a good idea to be uniform, it would be good for things to be clearer. "
On the other hand, some retailers opposed the changes, particularly those around extending the legal guarantee
period (n=4). There were concerns that consumers could delay notification of product defects which would pose
significant costs to retailers
The one where consumers don`t have to inform you within 2 months of a fault is unfair because the consumer can
knowingly withhold information about a fault longer. That makes it more difficult for the retailer.
Overall
remarks
Retailers held mixed views as regards the proposed changes. Many retailers felt that some changes would be
beneficial whilst others would present significant costs to businesses.
As such, many retailers welcomed the proposition to harmonise rules across EU MS. The general view was
that this would simplify cross-border trade and reduce conflict. Conversely, retailers commonly opposed the
proposed extension of the legal guarantee period, the reversal of burden of proof and, in a few cases, the
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State
Main responses
requirement to provide information to consumers as regards the availability of spare parts. The main concern
was that there is likely to be a misuse of these legislative provisions by consumers which would eventually
impose an undue burden, in terms of time and money, on retailers and manufacturers. Retailers also
generally felt that these changes disproportionately favoured consumers but little or no protection to
retailers /manufacturers.
Table 3.5 Q15. Overall impact of fully harmonising EU Rules
Question Response Value Sales channel Cross-border
sales
Size (Employees)
All
countries
Only
face-to-
face
Only
distance
sales Both Yes No
0-9
employees
10-49
employees
50-250
employees
Q15a. A single set
of rules will
increase
competition in the
retail sector in the
EU
Strongly
agree
Count 76 44 2 29 21 55 42 29 5
Column
N %
20% 20% 10% 22% 21% 20% 23% 19% 13%
Agree Count 127 79 3 45 28 99 60 47 20
Column
N %
34% 36% 15% 35% 29% 36% 33% 31% 53%
Neither
agree or
disagree
Count 71 39 7 24 17 54 28 36 7
Column
N %
19% 18% 35% 19% 17% 19% 15% 24% 18%
162
Question Response Value Sales channel Cross-border
sales
Size (Employees)
All
countries
Only
face-to-
face
Only
distance
sales Both Yes No
0-9
employees
10-49
employees
50-250
employees
Disagree Count 60 38 4 18 17 43 28 27 5
Column
N %
16% 17% 20% 14% 17% 16% 15% 18% 13%
Strongly
disagree
Count 25 15 1 8 10 15 14 10 1
Column
N %
7% 7% 5% 6% 10% 5% 8% 7% 3%
Don’t
know
Count 16 7 3 5 5 11 12 4 0
Column
N %
4% 3% 15% 4% 5% 4% 7% 3% %
Total Count 375 222 20 129 98 277 184 153 38
Column
N %
100% 100% 100% 100% 100% 100% 100% 100% 100%
Q15b. A single
set of rules will
increase
competition in
Strongly
agree
Count 59 39 2 18 16 43 41 17 1
Column
N %
16% 18% 10% 14% 16% 16% 22% 11% 3%
163
Question Response Value Sales channel Cross-border
sales
Size (Employees)
All
countries
Only
face-to-
face
Only
distance
sales Both Yes No
0-9
employees
10-49
employees
50-250
employees
our domestic
market from
retailers based in
other EU
countries
Agree Count 134 82 5 47 29 105 61 50 23
Column
N %
36% 37% 25% 36% 30% 38% 33% 33% 61%
Neither
agree or
disagree
Count 77 38 8 30 21 56 34 35 8
Column
N %
21% 17% 40% 23% 21% 20% 18% 23% 21%
Disagree Count 60 37 4 19 20 40 23 31 6
Column
N %
16% 17% 20% 15% 20% 14% 13% 20% 16%
Strongly
disagree
Count 25 12 0 11 9 16 12 13 0
Column
N %
7% 5% % 9% 9% 6% 7% 8% %
Don’t
know
Count 20 14 1 4 3 17 13 7 0
Column 5% 6% 5% 3% 3% 6% 7% 5% %
164
Question Response Value Sales channel Cross-border
sales
Size (Employees)
All
countries
Only
face-to-
face
Only
distance
sales Both Yes No
0-9
employees
10-49
employees
50-250
employees
N %
Total Count 375 222 20 129 98 277 184 153 38
Column
N %
100% 100% 100% 100% 100% 100% 100% 100% 100%
Q15c. A single
set of rules will
result in lower
prices for
consumers
Strongly
agree
Count 32 20 1 11 9 23 15 15 2
Column
N %
9% 9% 5% 9% 9% 8% 8% 10% 5%
Agree Count 85 55 2 27 20 65 41 34 10
Column
N %
23% 25% 10% 21% 20% 23% 22% 22% 26%
Neither
agree or
disagree
Count 68 47 3 18 16 52 33 27 8
Column
N %
18% 21% 15% 14% 16% 19% 18% 18% 21%
Disagree Count 110 60 7 43 31 79 51 45 14
Column 29% 27% 35% 33% 32% 29% 28% 29% 37%
165
Question Response Value Sales channel Cross-border
sales
Size (Employees)
All
countries
Only
face-to-
face
Only
distance
sales Both Yes No
0-9
employees
10-49
employees
50-250
employees
N %
Strongly
disagree
Count 60 25 6 27 18 42 30 27 3
Column
N %
16% 11% 30% 21% 18% 15% 16% 18% 8%
Don’t
know
Count 20 15 1 3 4 16 14 5 1
Column
N %
5% 7% 5% 2% 4% 6% 8% 3% 3%
Total Count 375 222 20 129 98 277 184 153 38
Column
N %
100% 100% 100% 100% 100% 100% 100% 100% 100%
Q15d. A single
set of rules will
lead to reduced
margins for
retailers
Strongly
agree
Count 67 36 2 29 21 46 34 29 4
Column
N %
18% 16% 10% 22% 21% 17% 18% 19% 11%
Agree Count 117 67 7 42 29 88 54 45 18
Column 31% 30% 35% 33% 30% 32% 29% 29% 47%
166
Question Response Value Sales channel Cross-border
sales
Size (Employees)
All
countries
Only
face-to-
face
Only
distance
sales Both Yes No
0-9
employees
10-49
employees
50-250
employees
N %
Neither
agree or
disagree
Count 68 44 2 22 17 51 33 29 6
Column
N %
18% 20% 10% 17% 17% 18% 18% 19% 16%
Disagree Count 71 48 3 19 17 54 32 31 8
Column
N %
19% 22% 15% 15% 17% 19% 17% 20% 21%
Strongly
disagree
Count 30 11 6 12 9 21 15 13 2
Column
N %
8% 5% 30% 9% 9% 8% 8% 8% 5%
Don’t
know
Count 22 16 0 5 5 17 16 6 0
Column
N %
6% 7% % 4% 5% 6% 9% 4% %
Total Count 375 222 20 129 98 277 184 153 38
167
Question Response Value Sales channel Cross-border
sales
Size (Employees)
All
countries
Only
face-to-
face
Only
distance
sales Both Yes No
0-9
employees
10-49
employees
50-250
employees
Column
N %
100% 100% 100% 100% 100% 100% 100% 100% 100%
Q15e. The
increase in the
reversal of the
burden of proof
period (i.e.
sellers must
prove that the
item was not
defective for the
entire duration of
the legal
guarantee) will
increase the
quality and
durability of
goods
Strongly
agree
Count 45 31 0 14 11 34 27 18 0
Column
N %
12% 14% % 11% 11% 12% 15% 12% %
Agree Count 110 68 3 39 30 80 42 48 20
Column
N %
29% 31% 15% 30% 31% 29% 23% 31% 53%
Neither
agree or
disagree
Count 62 34 5 22 18 44 33 25 4
Column
N %
17% 15% 25% 17% 18% 16% 18% 16% 11%
Disagree Count 84 54 6 24 17 67 40 36 8
Column
N %
22% 24% 30% 19% 17% 24% 22% 24% 21%
Strongly
disagree
Count 55 22 4 27 19 36 29 20 6
168
Question Response Value Sales channel Cross-border
sales
Size (Employees)
All
countries
Only
face-to-
face
Only
distance
sales Both Yes No
0-9
employees
10-49
employees
50-250
employees
Column
N %
15% 10% 20% 21% 19% 13% 16% 13% 16%
Don’t
know
Count 19 13 2 3 3 16 13 6 0
Column
N %
5% 6% 10% 2% 3% 6% 7% 4% %
Total Count 375 222 20 129 98 277 184 153 38
Column
N %
100% 100% 100% 100% 100% 100% 100% 100% 100%
Q15f. The
reduction in the
legal guarantee
period in countries
that now have a
longer period will
reduce the quality
and durability of
goods in these
countries
Strongly
agree
Count 41 24 2 15 13 28 23 17 1
Column
N %
11% 11% 10% 12% 13% 10% 13% 11% 3%
Agree Count 83 55 4 23 15 68 44 31 8
Column
N %
22% 25% 20% 18% 15% 25% 24% 20% 21%
Neither
agree or
Count 50 22 2 26 16 34 29 16 5
169
Question Response Value Sales channel Cross-border
sales
Size (Employees)
All
countries
Only
face-to-
face
Only
distance
sales Both Yes No
0-9
employees
10-49
employees
50-250
employees
disagree
Column
N %
13% 10% 10% 20% 16% 12% 16% 10% 13%
Disagree Count 113 74 7 32 28 85 47 51 15
Column
N %
30% 33% 35% 25% 29% 31% 26% 33% 39%
Strongly
disagree
Count 59 25 4 28 21 38 27 25 7
Column
N %
16% 11% 20% 22% 21% 14% 15% 16% 18%
Don’t
know
Count 29 22 1 5 5 24 14 13 2
Column
N %
8% 10% 5% 4% 5% 9% 8% 8% 5%
Total Count 375 222 20 129 98 277 184 153 38
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doi: 10.2838/045737