Most important points

• Consumers have a statutory right of withdrawal for many contracts concluded online or off-premises, which allows them to withdraw from the contract within a certain period of time without giving reasons.

• The withdrawal period is 14 days from receipt of the goods or conclusion of the contract for services, but may be extended in the absence of proper instruction.

• Entrepreneurs must clearly inform consumers about the right of withdrawal before the contract is concluded (withdrawal policy); in the event of a breach, the period begins later and penalties may be imposed.

• Exceptions: There is no right of withdrawal for sealed goods for health/hygiene reasons, custom-made products, perishable goods or services already provided in full with prior consent to waive the deadline.

• In the event of withdrawal, the services received must be returned: The trader must refund payments, the consumer must return the goods (usually at his own expense, if agreed in advance by the trader).

Legal framework and purpose

The right of withdrawal grants consumers a cooling-off period if they make purchases outside of business premises or via distance selling (e.g. online store). The background to this is that in these situations the consumer cannot physically inspect the goods or is exposed to the risk of being taken by surprise. The right of withdrawal in Germany is primarily regulated in Sections 312g and 355 of the German Civil Code (BGB). It allows the consumer to withdraw from the contract within a certain period of time without giving reasons. The protective idea is that the consumer should be able to make an informed decision and not be bound by the contract in the event of a wrong decision.

Requirements and deadlines

The standard withdrawal period is 14 days. In the case of sales contracts, it begins as soon as the consumer (or a third party nominated by him) has received the goods, and in the case of services, upon conclusion of the contract. To exercise the right of withdrawal, the consumer must send a clear declaration of withdrawal (e.g. by e-mail, post or using a model form provided by the trader) within the period. It is sufficient if the declaration is sent before the deadline expires.

Important: The period only runs if the consumer has been properly informed of their right of withdrawal. If there is no correct revocation instruction, the 14-day period does not begin to run, meaning that revocation is theoretically still possible long after the contract has been concluded (but for a maximum of 12 months and 14 days). Entrepreneurs are therefore required to use the statutory model withdrawal policy and to send the consumer the withdrawal policy in text form.

Exercise of revocation and consequences

If the consumer exercises the right of withdrawal within the deadline, both parties are no longer bound by the contract. Services already received must be returned:

• The entrepreneur must refund the purchase price or payments made within 14 days of receipt of the declaration of withdrawal. In doing so, he must also reimburse the shipping costs for the goods (standard shipping).

• The consumer must return the goods within 14 days of withdrawal. The consumer shall bear the costs for the return shipment if the trader has informed him of this in the revocation instructions. Otherwise, the trader shall bear the return costs.

• A loss in value of the goods is only to be compensated by the consumer if the loss in value is due to handling of the goods that goes beyond the examination of the properties and functionality (e.g. in the case of extensive use).

If a service has already begun, the consumer may have to pay compensation for the value of the service already provided, but only if he has been properly informed of this obligation and has expressly agreed to the service being commenced before the end of the withdrawal period.

Exceptions to the right of withdrawal

The law provides for some exceptions where there is no right of withdrawal in order to prevent abuse or to take account of special situations (Section 312g (2) BGB). Examples:

• Customized goods: Products that have been individually manufactured according to customer specifications (e.g. made-to-measure suits, personalized items), as these are not recyclable.

• Perishable goods or goods with a short expiry date (e.g. food).

• Sealed goods for health or hygiene protection if the seal has been removed after delivery (e.g. sealed mattresses, certain cosmetics).

• Sealed audio/video recordings or software as soon as the seal is removed (protection against copying).

• Newspapers, magazines (except subscription contracts).

• Accommodation, transportation, leisure event contracts for specific dates (e.g. hotel booking, flight, concert ticket).

• Services with complete performance: If the trader has provided the service in full before the consumer has exercised his right of withdrawal and the consumer’s consent and knowledge of the expiry of the right of withdrawal has been obtained in advance, the right of withdrawal shall lapse.

Companies in e-commerce need to be aware of these exceptions in order to inform their customers correctly and adapt their processes. Proper withdrawal management (instructions, procedures for returns and refunds) is essential for start-ups in online retail in order to avoid legal violations and customer dissatisfaction.