Clear information on products and services enables customers to make informed choices when purchasing products and services. It is impossible for customers or clients to make fully considered judgments about the goods and services they purchase when information regarding price, quality, services and products is not available,. As such, it is generally considered to be a basic responsibility of a business to provide essential information about its products and services that is easily accessible, reasonably complete, not confusing, and stated in plain and understandable language. Also, product and service information should be provided in a timely manner so that it can be of use to the consumer in their decision making process.
When selling products and services, disclosure of certain key information is usually required under consumer protection law. In the UK this includes safety, pricing, weights and measures, descriptions of products and services, the contract between a buyer and seller, competition between businesses, intellectual property and counterfeiting. There are additional, specific labelling requirements for certain products, such as food and precious metals.
Requirements on what information to provide to consumers - and how - depends on several factors. These factors may include: the target audience, the product itself, and the characteristics of the market for the product or service. Further, the greater the complexity of the product or service, the greater the requirement for information disclosure. Vendors should not confuse quality with quantity, however. Care must be taken to avoid information overload which can confuse or overwhelm customers.
Businesses that sell services, to individuals or other businesses, have further obligations with tighter regulations on some sectors over others. For example, under UK law, the main features of the service being offered should be stated explicitly. Generally, if the price is not pre-determined, a business must be able to supply a detailed estimate so that a client can use the proposed method to calculate the cost, check the figures and arrive at the price.
Service providers may need to present the terms and conditions used, including information on any contract terms that are governed by the law of a particular country ('the English courts have jurisdiction' or 'this contract is governed by Scottish law'). Further, as an after-sales guarantee may not be imposed by law, it is best practice to make clear whether such a guarantee exists or not.
Additionally, contracts may not contain ‘unfair terms’, which include:
● Fees and charges hidden in the small print
● Attempts to limit pre-existing legal rights
● Disproportionate default charges
● Excessive early termination charges.
Consumer protection legislation is not exhaustive. As such it is good practice to make certain that service information and product labelling provides relevant and fair information even if this is not a legal requirement. Ideally, any claims that are made about a product or service will also be supported by factual evidence and not be based solely on the opinion of the manufacturer or service provider.
There are many voluntary labelling standards that businesses can sign up to that are run by independent bodies, e.g. Fairtrade, Soil Association. These standards provide additional information about product characteristics and production methods. These include:
● Information about business ethics
● Information on provenance, e.g. product of Scotland
● Philanthropy, e.g. percentage of profits donated to charity.
Such claims can distinguish a product or service from those of competitors and sway customers in their purchasing decisions. As such, a certain level of verifiability is important to maintain consumer trust. ISEAL, which has a particular focus on the provision and credibility of sustainability information, states that such claims should be:
Insufficient, inaccurate or misleading information can damage customer confidence, risk legal challenge, introduce health and safety risks, and threaten business reputation.