Rule 7
Rule 7: duties of inventory e-commerce entities
Rule 7 applies to an e-commerce entity that owns the inventory and sells directly to consumers. It sets consumer-information, advertising, return and authenticity-related duties.
Need advice on Rule 7?
This article is for general information. Check the notified Rules and later amendments. For advice specific to your business, contact Bizeneed.
Introduction
An inventory e-commerce entity is defined in rule 3(1)(f) as owning the inventory of goods or services and selling them directly to consumers. This differs from a marketplace that provides a platform for transactions between buyers and sellers.
Rule 7 should be read with the general rule 4 obligations for e-commerce entities. Product-specific mandatory labels and disclosures remain governed by applicable laws as well.
Key takeaways
Disclosures belong before purchase
Rule 7(1) calls for clear and accessible return, warranty, shipment, payment, complaint and price information, along with legally mandatory notices.
Marketing must match reality
The entity may not pose as a consumer to post reviews, misrepresent features or publish advertising inconsistent with actual characteristics and usage conditions.
Returns and authenticity carry exposure
Rule 7(4) addresses specified returns or refunds, subject to the force-majeure late-delivery proviso; rule 7(5) addresses authenticity assurances.
Show transaction and payment terms
Check product pages for return, refund, exchange, warranty, delivery, return-shipping cost and grievance information, mandatory notices, payment options and fees, and a single total price with a breakdown of charges. Give a ticket number for each complaint so its status can be tracked.
Audit reviews and advertising
Do not post reviews while falsely representing the business as a consumer. Compare advertisements with actual product characteristics, access and usage conditions. Rule 7(2) and (3) apply directly to the inventory operator.
Handle return and refund triggers
Rule 7(4) prevents refusal of the specified return, service withdrawal or refund when goods or services are defective, deficient, spurious, misdescribed or late against the stated delivery schedule. Its late-delivery limb excludes delays caused by force majeure.
Substantiate authenticity assurances
Where the entity expressly or implicitly vouches for authenticity, rule 7(5) provides for appropriate liability in an action related to authenticity. Review listing badges, guarantee language and supplier evidence before making that assurance.
Practical checklist
Do
- Audit every fee and shipping cost shown before checkout.
- Check that return and warranty terms are easy to find.
- Track complaint ticket numbers and outcomes.
- Keep supplier evidence supporting authenticity claims.
Avoid
- Do not pose as a buyer to write reviews.
- Do not assume a blanket no-refund policy overrides rule 7(4).
- Do not display an authenticity badge without supporting records.
FAQs
Does rule 7 cover a retailer selling its own stock online?
Yes, where it meets the rule 3(1)(f) definition of an inventory e-commerce entity that owns inventory and sells directly to consumers.
Is every late delivery covered by the return/refund rule?
Rule 7(4) has a specific proviso for late delivery caused by force majeure, so the reason and evidence for the delay matter.
Official sources
Need help applying this rule?
Discuss online retail compliance