Goods, Digital Content or Digital Service? Why the Distinction Matters Under UK Consumer Law

In a world where online shopping and ordering from an app are becoming the norm, it is becoming increasingly important to understand the differences between physical goods, digital content and digital services. When a consumer wants to return something, many businesses will look at the same policy regardless of what was actually sold. Under the Consumer Rights Act 2015 (the "Act"), goods, digital content and services (including digital services) each have their own quality standards and their own remedies. By getting the category wrong, businesses risk over-promising refunds they don't owe or under-delivering on ones they do.

1. Physical Goods

Physical goods must be of satisfactory quality, fit for purpose, and match their description. Under the Act, consumers get a short-term right to reject faulty goods within 30 days for a full refund (a shorter period may apply to perishable goods). Alternatively, or once the 30 days have passed, consumers may ask the business to repair or replace the item; if a repair or replacement fails, the consumer can claim a price reduction or exercise a final right to reject. Faults that appear within six months of delivery are generally presumed to have been present at delivery. These rights apply to goods purchased both in store and online. However, online and other distance purchases carry an extra right under the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013: a 14-day change-of-mind cancellation, with no fault required, subject to exceptions such as personalised or perishable goods and sealed hygiene goods that have been unsealed. When a consumer purchases in store, there is no legal requirement for a no fault return.

2. Digital Content

Digital content, which includes apps, e-books, games, streamed or downloaded media, software, etc., is treated as its own category distinct from physical goods and services. Digital content supplied on a physical medium, such as a DVD or game disc, is treated as goods, and content supplied free of charge is generally outside these remedies unless it is supplied with paid goods, services or content. The same quality tests that apply to physical goods also apply here and the trader must hold the right to supply the content. The crucial difference is that there is no short-term right to reject. The statutory remedy path is repair or replacement, followed by a price reduction, which can be up to the full price. A refund is also due if the trader did not have the right to supply the content, and if the content damages the consumer's device or other digital content, the trader must repair the damage or pay compensation. For online purchases, the 14-day cancellation right is lost once the download or stream begins, provided the consumer expressly consented to this and acknowledged that the right would be lost.

3. Digital Services

Digital services, such as online platforms and cloud storage, are not a separate category under the Act and fall under its general services regime. They must be performed with reasonable care and skill, within a reasonable time and be consistent with what the customer was told. The remedy is repeat performance first, then price reduction. There is no statutory reject and refund route, although a price reduction may, in appropriate cases, amount to a full refund.

4. Subscriptions

Whether the underlying product is digital content, a physical good or a service, where it is supplied under a subscription contract, there are additional compliance requirements. For example, a streaming subscription would generally involve digital content and a monthly grocery subscription would fall under goods. New rules for subscription contracts are being introduced. The subscription contract provisions of the Digital Markets, Competition and Consumers Act 2024 ("DMCCA") will apply from January 2027.

The wider stakes for businesses have risen too: since 6 April 2025, the Competition and Markets Authority (CMA) can fine businesses directly for breaches of consumer law, including unfair commercial practices, of up to the greater of £300,000 or 10% of global turnover. Moreover, drip pricing and fake reviews have been banned outright.

For a business selling a mix of these categories, for example a device bundled with an app and a subscription, one blanket policy is unlikely to be effective. Goods that are faulty because of their built-in digital content are treated as faulty goods, while the app and the subscription may each follow different rules. With consumer rules now changing, this would be a good time to check your terms and refund pages to make sure the correct remedy applies to each part of what you sell.