The option to cancel via a button - a requirement for companies in the online distance selling business
A new legal regulation will come into effect as of 19.6.2026 that will significantly change online retailing. The aim is to make it just as easy for consumers to cancel contracts online, as it is to conclude them. To this end, the German legislator has created a new mandatory function - the cancel button. Hidden behind this seemingly simple button is a process that requires companies to make technical, organisational and content-related adjustments. Taking prompt action will reduce risks and, at the same time, ensure clear and transparent digital contract management workflows.
Defining the affected companies
The obligation to provide an electronic cancel function (a so-called cancel button) will apply to distance sales contracts concluded via an online user interface, such as, a website or app. This includes business models where the contract conclusions are initiated and managed digitally, for example, digital content providers, SaaS companies, platform operators, or online shops. Contracts concluded via telephone, fax, or an order form are not included. Contracts for which no right to cancel is provided for by law are likewise not affected. Companies that provide their services via digital user interfaces should carefully check whether they are subject to the new requirements.
Design of the cancel button
The new button has to be clearly identifiable and unambiguously labelled. The wording “cancel contract” would fulfil the requirements as would other comparable clear wording. Good readability must be ensured by using an appropriate font size and clear contrast. During the cancellation period, the button must be accessible at all times without the need for prior registration or identification. The cancellation may also be linked to the use of an app only if the original contract itself was concluded via an app. Companies can place the button in a customer account or on a central page, for example. The crucial factor is that it must remain permanently accessible to consumers.
Procedure for exercising the right to cancel
The process of exercising the right to cancel has to be designed in two stages. First of all, the company may only request information that is absolutely necessary to clearly identify the cancelled contract. This includes the name of the consumer, information to identify the contract concerned as well as details of the electronic means of communication to be used to send the subsequent confirmation of receipt. Asking for a reason for the cancellation is not allowed, as it would make it unacceptably difficult to exercise the right to cancel.
Once the consumer has submitted this information, they must then be given the opportunity to submit the cancellation via a separate confirmation function. This confirmation function must likewise be designed as clearly and unambiguously as the cancel button itself. After receiving the cancellation, a confirmation of receipt has to be sent to the consumer on a durable data medium, such as, an e-mail. This confirmation must contain the essential information regarding the cancellation as well as the date and time of receipt.
Other required changes
Companies not only have to make technical changes, but also adapt their legal documents. In future, the information on how to cancel must explain where the cancel button can be found. At the same time, the privacy policy must be supplemented in such a way that the data collected in the context of a digital cancellation as well as their processing and storage, are presented in an understandable way.
Legal consequences in the case of violations
If companies fail to implement the legal requirements, then they would risk warnings under competition law and administrative fines. A particularly serious consequence could be the extension of the cancellation period to a total of twelve months and 14 days. For business models with long-term or recurring services this could have significant economic consequences.
