Have you ordered goods from a shop in the European Union and had to wait weeks for your order to be delivered? Have you discovered that it is coming from abroad or that you overpaid for your package? In such a case, you may be dealing with a dropshipping site.
Dropshipping is increasingly being used for online shopping sites. What is dropshipping? In Dropshipping, the online shop has no stock, and the orders they receive are forwarded to a foreign supplier. Consequently, the supplier sends the package directly to the buyer. In addition, it gives the consumers an extensive selection of products.
Dropshipping sites are often advertised on social media. These adverts generally use professional-looking features such as images and videos and may enlist the aid of influencers to advertise their products. Sometimes the products advertised are of inferior quality or counterfeited and may be sold at a very high or deceptively low price. Products may be advertised as manufactured in Europe; nevertheless, the product is manufactured in a country outside Europe. Such practices may be misleading and unfair to the consumers, especially since legal recourse against sellers based outside of the EU is limited.
Dropshipping is perfectly legal; however, scammers are increasingly using this technique. A significant number of sellers do not abide by the distance selling requirement, such as providing the contact details on the website.
It is important to recognise a dropshipping site where the supplier is situated in a third country. Sometimes these sites may tell you, but others will not. Here are some essential signals for recognising a dropshipping site:
- Private Address indicated
If the address provided on the website happens to be a private residence, then you are probably dealing with a dropshipping website. You may want to search for the address on google maps where you are in doubt with the address provided.
- No original product images
Dropshipping sites tend to use images from other sites. You can take a screenshot of the image provided and compare it with other websites.
- Vague or long delivery times
Dropship suppliers are often located in Asian Countries resulting in very long delivery times.
- Language Errors
Generally, the description of the item is poorly translated to English.
Although dropshipping is not illegal, it may not always be beneficial for consumers. Some of the drawbacks are:
- Long delivery times
You would expect short delivery times when ordering online; however, since many suppliers are not situated in the European Union, delivery times tend to be longer.
- Products are not reliable
Products coming from outside the EU sold in the EU need to comply with the European Product Requirements. Dropshippers often do not have any control over the product they are selling, and therefore, they cannot guarantee good quality products.
- Paying too much
The item’s price on a dropshipping site tends to be higher than the price found for the same item directly at the marketplace sites.
When buying from an online shop, you will be entering an agreement with that shop. In dropshipping, the agreement will be between the consumer and the dropshipper, i.e., the online shop and not the supplier. Therefore, the dropshipper is responsible for delivering the item and must comply with the legal return and warranty rules.
The item bought, therefore, can be returned within 14 days, known as the cooling-off period. The dropshipper may provide the supplier’s address for the return of the package, which needs to be mentioned during the sale. Furthermore, if you have to pay for returning the object, the cost must also be indicated before the purchase.
The online shop has to offer a solution if the product received is defective or breaks down within the warranty period.
Due to the increase of dropshippers as of July 2021, the European Union created a new tax regime for goods shipped from outside Europe. This tax applies to both the buyer and the seller, causing the online seller to be directly involved in the delivery of goods and be obliged to declare his transaction for tax purposes and pay import VAT.
You may incur additional VAT for items bought for more than €150 from outside the EU. The online shop is required to inform you that the supplier is based in a third country before the purchase is made, as this may include additional fees and costs. However, often these shops do not inform you of this fact resulting in surprising custom costs at the time of delivery.
If your package is held at customs and charges need to be paid, you may refuse the package and will be entitled to a refund of the item. The online shop where the order was placed initially is responsible for the returns and refunds.
The information on the location of a shop is usually in the terms and conditions of the website. Webshops focused on the European Market are obligated by law to indicate where the head office is situated in the general terms and conditions.
If a problem arises with the product, try to find a solution directly with the trader in writing where possible.
If the trader has promised you a product that was never shipped or a product of a certain quality but sent a product of inferior quality or not the one ordered, the probabilities are that the trader defrauded you. In such a situation, the chances of getting the money back are limited as fraudulent sellers tend to refuse to reimburse you the money. You could try to contest the transaction if you paid via a credit card by contacting the bank and attempt to get your money back. This procedure is known as the chargeback procedure.
You may also file a complaint with the Cybercrime Unit against unreliable dropshippers who can take measures to end the illegal practice.
If you have a problem with a trader established in a European Member State, Iceland or Norway, contact the ECC.