AI customer service chatbots for UK small businesses: costs, consumer law and UK GDPR
How this guide works: it’s a research guide built from providers’ pricing pages and guidance from the CMA and the ICO, checked 24 October 2026. It isn’t a hands-on review. Both chatbot providers below price in US dollars; pounds in brackets are approximate, using European Central Bank reference rates for 23 October 2026, and don’t include VAT. It isn’t legal advice. None of the links on this page are affiliate links.
Who this is for
You run a shop, salon, trades business or small online store, and the same questions keep arriving: opening hours, delivery times, returns, “do you cover my area?” An AI chatbot can answer those around the clock, using your own help pages and policies as its source. The good ones hand over to a person when they can’t help.
This guide covers three things: what the tools cost, what UK consumer law expects when an AI talks to your customers, and the data protection checks to do first.
How AI chatbots work now
Older chatbots followed scripted decision trees. Newer “AI agents” read your help centre, FAQs and policies and write answers in plain language. That’s more flexible, but it also means they can get things wrong, for example inventing a refund policy you don’t have. The setup work is mostly about giving the bot good source material, setting limits on what it can say and do, and making the handover to a human easy.
What they cost
Tidio
Tidio’s pricing page lists (tidio.com/pricing, checked 24 Oct 2026):
- Free: $0, with up to 50 billable conversations.
- Starter: $24.17 a month (≈£18.08), with 100 billable conversations and a one-off allowance of 50 conversations with Lyro, Tidio’s AI agent.
- Growth: from $49.17 a month (≈£36.78), with more conversations.
- Larger plans are priced by usage. The prices shown were for yearly billing; paying monthly costs more. There’s a 7-day free trial with no card needed.
Intercom with Fin
Intercom’s pricing page lists (intercom.com/pricing, checked 24 Oct 2026):
- Essential: $29 per seat a month (≈£21.69), shown as $19 per seat (≈£14.21) for new customers paying annually.
- Advanced: $85 per seat a month (≈£63.58) and Expert: $132 per seat a month (≈£98.74), both paid annually.
- Fin AI Agent: $0.99 per outcome (≈£0.74). Intercom says you aren’t charged if Fin can’t answer or the customer asks for a person, and you can set spending limits.
- There’s a 14-day free trial.
Per-outcome pricing is easy to start with but harder to predict, so set a monthly cap. Seat prices apply to each person on your team who answers chats.
| Tool | Free option | Entry paid price | How AI is charged |
|---|---|---|---|
| Tidio | Free plan, 50 conversations | $24.17/month billed yearly (≈£18.08) | Lyro AI conversations by allowance |
| Intercom | 14-day trial | $29/seat/month (≈£21.69) | Fin: $0.99 per outcome (≈£0.74) |
VAT on overseas software
Prices from overseas providers usually exclude tax. If you’re VAT-registered and buy services from abroad, the reverse charge normally applies; if you’re not registered, you may be charged UK VAT at checkout. Our starter stack guide explains this in more detail.
What consumer law expects: the CMA guidance
On 9 March 2026 the Competition and Markets Authority published guidance on using AI agents with consumers (GOV.UK, Complying with consumer law when using AI agents). The key points for a small business:
- Same rules as staff. Consumer law applies whether customers deal with a person or an AI agent. You’re responsible for what your AI agent says and does, even if a third party supplies it.
- Be clear it’s AI where knowing whether they’re dealing with AI or a person could affect a customer’s decisions, and don’t overstate what the agent can do.
- Train and test it on customers’ rights, such as refunds and cancellation rights under the Consumer Rights Act 2015 and the Consumer Contracts Regulations 2013, and the rules on unfair practices in the Digital Markets, Competition and Consumers Act 2024.
- Keep humans involved. Monitor what it does and fix problems quickly.
The CMA can now fine businesses directly for breaking consumer law, with penalties of up to 10% of worldwide turnover. In practice, the safest set-up is a bot that answers simple factual questions from your published policies, never makes up terms, and passes refund disputes, complaints and anything unusual to a person.
UK GDPR checks before you switch it on
Chat transcripts usually contain personal data: names, emails, order numbers, sometimes more. Before you go live:
- Update your privacy notice to say you use a chatbot, what it collects and who provides it. The ICO’s advice for small organisations explains what to include (ICO).
- Check the provider’s data terms: where data is stored, how long transcripts are kept, and whether they’re used to train models.
- Have a data processing agreement with the provider, which business plans normally include.
- Don’t let it make significant decisions on its own, such as refusing a refund or an account, without a route to a person. The ICO’s guidance on AI and data protection covers transparency and human review (ICO).
- Have a data protection complaints process. Under the Data (Use and Access) Act, organisations have had to provide a way to make data protection complaints since 19 June 2026 (ICO statement; ICO, how to deal with complaints).
Our AI and UK GDPR guide has a fuller checklist.
A sensible first set-up
- Write or tidy up clear pages for delivery, returns, opening hours and contact details. The bot is only as good as these.
- Start on a free plan or trial, and limit the bot to those topics.
- Add a short line at the start of each chat saying it’s an AI assistant and how to reach a person.
- Read a sample of transcripts every week for the first month and correct anything it gets wrong.
- Set a spending cap if you’re charged per conversation or outcome.
FAQ
Do I have to tell customers they’re talking to a bot?
The CMA’s guidance says you should be clear when it’s AI if that could affect customers’ decisions. Saying so at the start of the chat is the simple way to meet that, and it builds trust.
If the chatbot promises a refund by mistake, am I bound by it?
The CMA says businesses are responsible for their AI agents in the same way as for staff. Treat anything it tells customers as coming from you, and get legal advice on specific cases.
Can a chatbot use my customer data to train its AI?
It depends on the provider and plan. Check the data processing terms before you sign up, and tell customers in your privacy notice.
Sources
All checked 24 October 2026 unless stated. Prices change, so check before you buy.
- Tidio pricing: tidio.com
- Intercom pricing: intercom.com
- CMA, Complying with consumer law when using AI agents (9 March 2026): gov.uk
- ICO, Guidance on AI and data protection: ico.org.uk
- ICO, Are you transparent about how you use people’s data? (small organisations): ico.org.uk
- ICO, Statement on the commencement of the Data (Use and Access) Act (5 February 2026): ico.org.uk
- ICO, How to deal with data protection complaints: ico.org.uk
- ECB euro reference rates, 23 October 2026: ecb.europa.eu
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