New EU Law Will Cost E-Retail Consumers €10 Billion
Last week's European Parliament vote on e-retail will be detrimental to the growth of the online industry, a trade body claimed on Thursday
Posted by Killian McAleese, 31st March 2011
The Interactive Media in Retail Group (IMRG), the body whose membership includes such prominent industrial players as eBay, ASOS, PayPal and the Arcadia Group, had unsuccessfully lobbied against the amended Consumer Rights Directive, which was approved by the European Parliament on 24th March.
Today the IMRG detailed several implications of the legislation's implementation which the group believe are likely to hinder the growth of the online retail business in Europe.
The most alarming of these effects is a change to the rules on product returns which IMRG claims will cost the industry €10 billion in additional delivery charges, or 4% of the estimated total value of the industry in 2012.
The cost of returns to e-retailers prior to the legislation's implementation is €5.7 billion. IMRG claimed on Thursday morning that this cost would rise to €15.7 billion, forcing many small retailers out of business.
IMRG Chief Executive James Roper described the approved amendments to the Consumer Rights Directive as “disastrous”, arguing that such additional costs will likely be passed on to consumers.
“These new amendments from the EU are some of the most disastrous for the online industry yet. As well as being unnecessary they would inevitably lead to significant price increases being forced onto already hard-pressed consumers, pushing up prices across all retail channels”
But Roper also referred to further economic implications of the Directive, warning that if the amendments are not redrafted, "the negative impact will not just affect the online shopping industry, but the entire economic recovery as a whole."
The amendments have yet to come into force, however, because although they were approved in the European Parliament, MEPs nevertheless referred the Directive to the European Council for approval.
Today's EU Vote 'a Setback for Online Retail'24th March 2011
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