Click and Collect– some key risks for retailers
Victoria Robertson looks at a number of commercial risks for retailers in offering an online delivery service.
Click and Collect first became popular in the early 2000’s, with Argos leading the way in the UK. It was marketed as the ultimate customer convenience tool and with lockdown no. 2 in place, it is being used by an ever increasing number of retailers. Government guidance is that non-essential shops can still sell goods throughout lockdown if they do so on a Click and Collect basis and a wide variety of businesses (from Debenhams to garden centres) have now launched Click and Collect services to keep trading throughout lockdown. Click and Collect is a low cost alternative route to sales for retailers because if goods can be sold on-site no delivery charges are incurred. With the pandemic having ongoing implications for retailers for the foreseeable future it is imperative to be aware of the current challenges involved in offering a Click and Collect service.
There continues to be a number of benefits to both the customer and the retailer in using Click and Collect, for example, the customer is saving time and it may be that (when shops re-open) customers collecting their orders in-store buy additional items. Additionally, there are a number of commercial risks for retailers in offering an online delivery service which do not affect Click and Collect. One such risk is failed home deliveries, NetDespatch recently estimated the overall cost to online retail stakeholders of failed delivery as £1.6 billion.
The following current legal issues in particular should be considered in respect of offering a Click and Collect service.
Click and Collect Fraud
Click and Collect fraud is on the rise. One potential reason is that retailers fail to check ID when customers pick up orders. According to security experts, hundreds of thousands of shoppers are being targeted by fraudsters who are using Click and Collect as an easy way to steal pre-paid items.
Retailers should ensure staff and, where products are collected from an intermediary, the intermediary’s staff are trained to ask all customers to produce sufficient identification at the pick-up point, including the card that was used for payment. Retailers should also consider asking the customer to answer a security question at the point of collection and, if the customer is unable to answer, refusing to allow the customer to take the goods. If an intermediary is involved the products should then be returned to the retailer.
Age-restricted products and Challenge 25
A retailer will know, Challenge 25 is a policy whereby anyone who is buying alcohol within the UK, who appears to be below the age of 25, can be asked to provide acceptable ID. The Licensing Act 2003 requires all licensed premises in England and Wales to adopt an age verification policy in relation to the sale and supply of alcohol. Selling age restricted products to a customer under the minimum legal age can result in a range of penalties including fines and imprisonment.
It is important that retailers ensure a policy is effectively implemented when providing Click and Collect services. The Challenge 25 policy is not mandatory but it is a sensible way to meet the statutory ‘proof of age’ policy condition. Staff must be trained on how to avoid underage sales and how to verify a customer’s age. Retailers should consider whether to use online age verification checks or age verification checks on collection or both. Consideration should be made especially where lockers are used at the pickup point. A policy should be put in place whereby failure to provide an acceptable form of ID results in the collection of the alcohol and any other age-restricted products being refused and the products retained by the retailer. This, of course, entails additional delivery charges for retailers so it is important to be upfront about this policy.
Planning permission and licences
Permitted development rights allow changes to be made to buildings and use of land without needing planning permission to be granted by the relevant local planning authority. From 2015 the GPDO introduced a permitted development right for the provision of Click and Collect services meaning retailers and intermediaries are allowed to build Click and Collect lockers and can offer Click and Collect services on their premises without planning permission. However, retailers need to be aware of and investigate whether the local planning authority has put an Article 4 direction in effect. An Article 4 direction can be put into effect to dis-apply the permitted development rights meaning an application for planning permission may be necessary. Retailers should also be aware of the need to apply to the local planning authority for a determination as to whether prior approval will be required for the siting, design and external appearance of the lockers.
If a retailer plans on selling alcohol through its Click and Collect services and the alcohol is to be collected from the retailer’s own premises it will need to ensure that its current premises licence indicates the correct hours by which the sale by retail of alcohol will take place. A retailer may have to make an application to the local authority to vary the hours on its premises licence if it is restricted to particular times and intends the Click and Collect services to run outside of those times. Retailers may also be required to submit a new plan of its premises to the local authority. Retailers should contact the relevant local authority to check if they are required to take any action.
The Consumer Contracts Regulations (Information, Cancellation and Additional Charges) 2013
The Consumer Contracts Regulations came into force in the UK in June 2014 and apply when a “consumer” (i.e. an individual not acting in a business capacity) enters into a contract online. If a consumer is ordering goods online, whether for delivery or Click and Collect, they will have additional rights under these Regulations and it is important that retailers are aware of and comply with these rights, including but not limited to:
- a right to cancel 14 days after the day on which the goods come into the physical possession of either the consumer or a person authorised by the consumer to take possession of the goods (but not the carrier of the goods)
- a right to additional information before making a purchase online, including details of the trader and details of how to cancel
Failure to provide the consumer with all the correct and necessary information as set out in the Regulations will have consequences for the retailer. For example, if all the necessary details surrounding cancellation are not provided the consumer will be entitled to a 12-month cancellation period for certain goods as opposed to 14 days. For FMCG retailers in particular this could cause serious issues as the order being cancelled may include items which are no longer part of the retailer’s current product line and have implications for any leases with turnover rent provisions.
Personal Data and the Data Protection Act 2018 (GDPR)
Personal data is information that relates to an identified or identifiable person who could be identified, directly or indirectly based on the information. Retailers must ensure that personal data is processed fairly and lawfully and in accordance with data protection legislation. Where retailers use different networks to provide their Click and Collect services, for instance a third party collection facility and location, they must take ensure the third party complies with data protection legislation.
Retailers must, as controllers of customers’ personal data, ensure that they comply with data protection legislation including ensuring that any third party processors they appoint (including intermediaries where the Click and Collect service is made available from third parties’ premises) comply with their requirements as processors of customers’ personal data. Retailers should ensure that they have appropriate policies in place and a privacy notice. It may be a good idea to undertake a data protection impact assessment to track how individuals’ personal data is being used in relation to the Click and Collect service.
Ensuring that Click and Collect is COVID secure
Retailers have an obligation to staff to ensure their health and safety is protected. Where retailers fail to follow COVID regulations they could be served a Prohibition Notice, a Fixed Penalty Notice or be prosecuted. They could also face claims from employees.
The obligations in relation to COVID include a thorough risk assessment to ensure staff are working in a COVID secure workplace, particularly when in a customer facing role including handling Click and Collect. Face coverings must now be worn by those in a customer facing role, unless a staff member is exempt from this requirement. Retailers should also consider whether other measures such as barriers to separate staff and customers are necessary and can be implemented.
We recommend that retailers actively consider how goods are handed over and returned, for example, by allocating appropriate collection slots to customers with sufficient time between each to reduce the likelihood of excessive queuing and to help maintain social distancing.
Retailers should also consider how payment for goods is taken, for example can payment be made online, prior to collection, or over the phone to minimise interaction between staff and customers? It is also worth considering when the Click and Collect services will be made available, to enable the retailer and staff to continue to manage the store and keep it COVID secure whilst not having staff on site for the entire usual trading hours.
Retailers should use appropriate signage and instructions for customers in respect to queues and distancing. If retailers provide electronic collection services such as touch screens, disinfection between collections will have to be considered.
If you are a retailer offering or considering offering Click and Collect, it is important to ensure that not only that COVID safety is considered but also that customers’ personal data is properly handled and steps taken to minimise fraud and other negative customer behaviour which can arise from Click and Collect. Where dealing with consumers retailers must provide appropriate consumer protection and, when selling alcohol, licensing and age restrictions must be complied with.
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